The U.S. Trade Representative late Monday let stand the International Trade Commission’s June decision banning new handsets manufactured by Qualcomm because the company had infringed Broadcom patents. An agreement by Verizon Wireless to pay licensing fees to Broadcom of up to $200 million so that it could import new handsets appeared to weigh heavily in USTR’s decision. USTR also said Broadcom had dealt with public safety issues raised by the ban.
Court of International Trade activity
Verizon Wireless cannot count on an appeals court decision whose outcome is uncertain or a “precedent-setting presidential veto” to remove an International Trade Commission ban on Qualcomm 3G chips, CEO Lowell McAdam said Monday. And finding a software workaround raises unanswered legal and technical questions, he said. So Verizon is looking to market forces to clear the “roadblock,” Thursday striking a licensing deal with Broadcom (CD July 20 p11). A presidential veto only would have delayed resolving the problem, since it would apply only to one patent, McAdam said. The Broadcom deal covers six patents, including those involved in separate litigation in Santa Ana. The company does not expect the deal, which gives Broadcom $6 per EV-DO 3G handset, to have a significant impact on Verizon Wireless financial results, he said. The Broadcom agreement also opens a strategic partnership that will carry over into Verizon’s FiOS and other businesses, he said. Verizon will maintain a “strong partnership” with Qualcomm, and the agreement will not affect Verizon’s 4G plans, he said. A Broadcom/Qualcomm agreement could upset Verizon’s agreement, Stifel Nicolaus analysts said Monday. McAdam declined to comment on what would happen if a Broadcom-Qualcomm agreement offered better terms than the one Verizon signed.
The U.S. Appeals Court, Federal Circuit, dismissed a petition by Qualcomm and carriers and handset makers to stay an International Trade Commission ban on Qualcomm chips that infringe on Broadcom patents. The court lacks jurisdiction to review the June 21 ITC order until the presidential review period ends Aug. 6, it said.
Verizon Wireless and Broadcom signed a licensing agreement that will let Verizon Wireless sell handsets with chips subject to an International Trade Commission injunction. The phones use wireless chip technology at the heart of a legal dispute between Broadcom and Qualcomm. Verizon Wireless said the deal will let it sell new models of EVDO 3G handsets, in return paying Broadcom $6 per handset to a maximum of $200 million. The company said it withdrew from an effort to get the president to veto the ITC order and also will withdraw a motion to stay the ITC remedy that it filed in the Federal Circuit Court of Appeals. Analysts at Stifel Nicolaus thought Verizon Wireless and Qualcomm had a good shot at a veto but “this agreement will reduce the likelihood significantly,” with Verizon Wireless no longer involved in the campaign and “the existence of even a single license agreement will allow opponents of the veto to argue that there is no longer any need for exercising the extraordinary relief,” they said.
The U.S. International Trade Commission (ITC) denied Qualcomm and Verizon Wireless requests to stay a ban on import of new models of cellphones containing Qualcomm chips that the ITC found infringe a Broadcom patent. Qualcomm and other parties want a presidential veto of the ban. Qualcomm did not issue a statement on the denial. Stifel Nicolaus said in a research report that the U.S. Federal Circuit Court of Appeals could decide to hold a hearing on a stay, as it did in the Verizon-Vonage patent dispute. The ITC has until June 27 to argue that the ban should not be lifted pending appeal. “If the President (through the U.S. Trade Representative) ultimately refuses to veto the ITC’s exclusion order, then it is important for Qualcomm and the carriers to have secured a stay because the ban would otherwise go into effect immediately,” the firm said: “We believe that Qualcomm and its carrier allies are continuing to lobby the individual agencies that advise the President on these matters as well as USTR, pushing them to invoke the rare presidential disapproval mechanism. We continue to believe that, despite the fact the last such veto was issued in the mid-1980s, Qualcomm has a good chance. However, we believe it is likely that the decision will go to the wire.”
Qualcomm said it will join wireless carriers in asking the U.S. Appeals Court, Federal Circuit, to stay an International Trade Commission order banning import of new wireless handsets with Qualcomm chips held to infringe a Broadcom patent. Qualcomm also will ask President Bush to veto the decision, the company said. CTIA blasted the move as bad for consumers, saying it will slow 3G network rollouts. COMCARE and the Assn. of Public Safety Communications Officials said the order will hurt efforts to make 911 more accurate. ITC in a “split-the-baby decision” Thurs. said the ban will apply to future handset models (CD June 8 p8), but not those already being imported.
The post-Telecom Act generation of communications attorneys is populous and prosperous, drawn to the industry by a new legislative environment and subsequent telecom and tech booms, according to lawyers we spoke with. For this collective analysis, Communications Daily decided to profile young attorneys who were mentioned as especially promising by multiple sources -- often off the record -- and the system in which they operate. Many belong to the FCBA Young Lawyers Committee (YLC), open to communications lawyers under 35 or with fewer than 7 years in practice; those were roughly the criteria -- with minor exceptions -- for this article.
Broadcom and Qualcomm Wed. brought their patent battle to the International Trade Commission (ITC). The agency heard arguments over whether to issue an injunction against Qualcomm importing some chips in cellphones. Qualcomm said an injunction would harm competition and shake the U.S. mobile market. Broadcom said Qualcomm exaggerated the effect on competition, especially in light of new products reaching market since an ITC administrative law judge’s 2006 ruling in Broadcom’s favor. Each company had a congressman testify in its behalf.
Broadcom and Qualcomm dropped several patent lawsuits against one another. The deal heads off jury trials in all 5 Qualcomm suits against Broadcom -- including high-profile claims of infringement and trade secret misappropriation in U.S. Dist. Court, San Diego -- and counterclaims by Broadcom. The settled suits involved 6 Broadcom patents and 4 Qualcomm holds. Meanwhile, Nokia sued in the Netherlands and Germany, seeking declarations that many Qualcomm patents no longer apply in the EU.
Alcatel-Lucent’s patent victory over Microsoft is only the first in a string of cases the company filed when it was just Lucent over patents that the original Bell Labs had developed. This year will see 3 more cases involving Microsoft, Dell and Gateway over various digital audio-visual technologies. A jury in the U.S. Dist. Court, San Diego gave Alcatel-Lucent a $1.52 billion award against Microsoft (CD Feb 23 p1). Alcatel-Lucent wouldn’t comment on the outcome’s effect on future suits. Microsoft denied the decision would have any effect.