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Qualcomm CEO:Patent Lawsuits Won't Affect Earnings




05-25-06 12:12 AM EST
SEOUL -(Dow Jones)- Patent-related lawsuits concerning Qualcomm Inc. (QCOM) won't likely affect the wireless semiconductor maker's earnings, its chief executive said Thursday.

"Although there'll be some legal expenses, the lawsuits won't affect our earnings," Paul Jacobs, president and chief executive at Qualcomm told reporters Thursday in a press briefing at Seoul Digital Forum 2006.

In October, six handset makers complained to European Union competition authorities that Qualcomm was harming the 3G handset market by charging excessive royalties and refusing to give potential chip-set competitors fair and nondiscriminatory terms when licensing out its third-generation wireless technology called wideband code division multiple access, or WCDMA.

Qualcomm also sued the world's largest handset maker Nokia Corp. (NOK) last November, alleging the infringement of a dozen patents. It has a licensing deal with the mobile phone giant that expires next April.

"We have a good relationship with Nokia and discussion is continuing," Jacobs said, without elaborating.

In March, Qualcomm filed an intellectual property-infringement case against Broadcom Corp. (BRCM), one of many lawsuits the two firms have filed against each other.

Meanwhile, Jacobs said the adoption of the WCDMA won't change the company's royalty structure because "WCDMA is basically CDMA".

San Diego, California-based Qualcomm, developed CDMA, short for code-division multiple access, a rival standard to the dominant cellular standard GSM, and controls most of the key patents.

CDMA is used in the United States and South Korea. Every handset in South Korea has a CDMA chip and handset manufacturers have to pay royalty fees to Qualcomm.

-By Seon-Jin Cha, Dow Jones Newswires; 822-732-2165; [e-mail]

-Edited by Costas Paris