Nokia GSM phones don’t infringe Qualcomm patents, a International Trade Commission judge said in an initial determination. The ruling isn’t a final decision. That will come in late April. But the commission historically doesn’t “disturb” it, former ITC lawyer Lyle Vander Schaaf said in an interview.
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Broadcom will not seek a new trial with Qualcomm after a Santa Ana court killed an order that Qualcomm pay double damages and attorney fees to the semiconductor rival, Broadcom said Friday. It “instead will accept the $19.6 million in compensatory damages as originally awarded by the jury and will immediately pursue an injunction against Qualcomm’s infringing products.”
A Federal Circuit Appeals Court ruling threw “a wrench” into Qualcomm-Broadcom litigation in Santa Ana, Calif., that could reduce damages awarded to Broadcom and remove Qualcomm liability, Stifel Nicolaus said in a note. Last August, the Santa Ana U.S. District Court ordered Qualcomm to pay double damages of $39.3 million and Broadcom attorney fees after a jury determined Qualcomm infringement of three Broadcom patents was “willful” (CD Aug 15 p10). However, District Judge James Selna is now reviewing the order in light of a September Federal Circuit en banc decision tightening the willfulness standard. Selna urged Qualcomm to file a reconsideration petition and subsequently sent the parties a pre-hearing draft of his tentative opinion. Selna said the Federal Circuit case, In re Seagate, meant the jury’s willfulness finding could not stand unless a new trial on all infringement issues was held. Selna also asked Broadcom to decide if it wanted the retrial or would rather cut its losses and accept the original $19.6 million damages award and no attorney fees. If the tentative ruling solidifies, “Broadcom will likely not seek a new trial,” but Qualcomm will push for one, Stifel Nicolaus said. Selna is expected to rule on Seagate’s implications “any day now,” it added. Seagate has “at a minimum” reduced the damages award to $19.6 million, but it’s uncertain whether Selna will void the original trial, it said. “Qualcomm has the stronger legal argument, but courts do not lightly erase a jury trial,” it said. Meanwhile, the threat of an injunction still looms: “Assuming the jury verdict is not set aside, the real risk to Qualcomm… is not the damages award, but rather, the risk of an injunction,” Stifel Nicolaus said. The Supreme Court’s eBay decision, not Seagate, governs the District Court’s injunction ruling, it said. “One of the factors emerging as important in post-eBay patent injunction decisions is whether the two companies compete,” it said. “We understand that Broadcom does not compete with Qualcomm in the areas covered by the patents, although we also understand that Broadcom sought to provide evidence at trial that they have ‘practiced’ each patent. We expect this issue to weigh heavily in the judge’s analysis, but the lack of a record may make that difficult.” Qualcomm is expected to argue that a Broadcom settlement with Verizon Wireless related to Qualcomm chips banned by the International Trade Commission shows “monetary payment is sufficient” and an injunction “inappropriate,” the analyst firm said. However, “Broadcom would have a potent response that it only decided to license its technology to Verizon because it had certain larger business objectives, which it does not have with its opponent Qualcomm.”
Analysts bombarded Broadcom officials with questions about spending in a third quarter conference call after the company said Q3 profits had sunk 75 percent from a year earlier. Net income plunged to $27.8 million after the chip maker spent $352.3 million on research and development, almost $80 million more than it did in 2006. But strong Bluetooth, wireless LAN and DTV businesses drove company revenue to $950 million, up 5.2 percent from last year, it said late Tuesday.
A precedent-setting court order staying the International Trade Commission Qualcomm chip ban for third parties is “very good news” for T-Mobile but a long term “concern” for the ITC and patent holders, officials told Communications Daily Thursday. Late Wednesday, the U.S. Appeals Court for the Federal Circuit ordered a partial stay of the ITC limited exclusion order against Qualcomm chips that infringe Broadcom patents. The ruling could be a “harbinger for a favorable final decision” for Qualcomm, a Stifel Nicolaus analyst said.
The International Trade Commission voted to investigate whether Nokia’s 3G WCDMA handsets infringe InterDigital patents. The commission has “not yet made any decisions on the merits of the case,” it said in its announcement late Wednesday. A Nokia spokeswoman said the company would defend its rights, products and integrity. Regardless of the outcome, the investigation could hurt Nokia’s effort to persuade the commission to investigate Qualcomm, said Jay Sandvos, a lawyer with Bromberg and Sunstein.
Unwilling to let Qualcomm’s harried attorneys rest, Nokia complained to the U.S. International Trade Commission that Qualcomm committed unfair trade practices by infringing five Nokia patents in its CDMA and WCDMA/GSM chipsets, it said Friday. Nokia wants an ITC ban on import of the chipsets and devices using them, as occurred with Qualcomm chips infringing Broadcom patents. The Thursday filing came the same week a federal judge in Santa Ana, Calif., ordered Qualcomm to pay Broadcom double damages and attorney’s fees (CD Aug 15 p10) and less than two weeks after the president declined to veto the ITC ban (CD Aug 7 p3) and a San Diego judge ruled against Qualcomm in a separate Broadcom patent dispute (CD Aug 8 p6).
An outfit alleged to have added Web site service fees to the phone bills of hundreds of thousands of small businesses and non-profits without permission will pay $1.2 million-plus to settle Federal Trade Commission charges. In its June 2006 complaint, the FTC said telemarketers hired by the operators promoted a “free” 15-day trial of a Web site design. Targets were told they wouldn’t be charged, and the site automatically cancelled if they didn’t approve it. Whether or not targets agreed, the operators often added a fee to their phone bills, the FTC said. A U.S. District Court judge in Houston halted operations by WebSource Media, doing business as BizSitePro, Eversites, Telsource Solutions, Telsource International, as well as principals Marc Smith, Kathleen Smalley, John Ring, Keith Hendrick, Steven Kennedy and James McCubbin. The court order included judgments of $24.7 million, the full amount of consumer losses, suspended for defendants’ inability to pay.
A federal district court judge ordered Qualcomm to pay Broadcom double damages of $39.3 million for infringing three Broadcom patents. Judge James Selna, Santa Ana, Calif., also ordered Qualcomm to pay Broadcom attorney fees. In May, a federal jury ordered Qualcomm to pay $19.64 million in damages for willfully infringing the patents. The “willfulness” finding gave the judge leeway to boost damages as punishment. “There is a spectrum of improper conduct for determining the amount to award,” Selna said. “That Qualcomm’s conduct was not at the most egregious end of the spectrum does not mean that no enhanced award is due.” Qualcomm declined to comment because the case isn’t over. The decision shouldn’t surprise Broadcom or Qualcomm since a judge “castigated and criticized” Qualcomm for misconduct in a San Diego ruling handed down last week (CD Aug 8 p6), said lawyer Jay Sandovs. The decision to double damages was a “quasi-punitive step,” he said, noting that the judge could have tripled them. An injunction hearing in the case began Tuesday, and will likely last two to three days, said Stifel Nicolaus’ Cody Acree. An International Trade Commission ban on import of Qualcomm chips won’t necessarily influence the court’s injunctive decision, he added. Monday’s resignation by Qualcomm general counsel Lou Lupin, called a “personal decision” by Qualcomm, likely was tied to Qualcomm’s recent court failures, Sandovs said. Qualcomm CEO Paul Jacobs could be next on the chopping block, he said. He was directly responsible for Qualcomm litigation moves, and Qualcomm’s board could blame him for signing off on them, he said.
Qualcomm may only win a court stay on the International Trade Commission ban of its chips if it agrees to post a hefty bond on all imports, an attorney said in an interview. But reaching a settlement with Broadcom might be a better choice, another said. The president Monday declined to veto an ITC order that bans importation of Qualcomm chips said to infringe on Broadcom’s patents (CD Aug 7 p3). But Monday was only the start of a bad week for Qualcomm: Later, a San Diego federal court ruled against the company in a separate patent clash with Broadcom.