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Saturday, 01/27/2007 10:48:47 AM

Saturday, January 27, 2007 10:48:47 AM

Post# of 433037
IMO:Other Government Agencies are involved in Qualcomm's "indiscretions" and there will be further Investigations.

One of the biggest blows to Qualcomm came in the form of advisory votes, sought by the judge, in which the jury questioned Qualcomm's integrity.

In one advisory vote, the jury found “clear and convincing evidence” that Qualcomm had withheld previous scientific studies on video-compression from the U.S. Patent and Trademark Office when applying for one of the patents in question. The jury's advisory vote said that the patent is “unenforceable due to Qualcomm's inequitable conduct in the patent application process.”

In the second advisory vote, the jury found that Qualcomm had waived its right to enforce both of the patents in the case, because it had failed to inform a standards-making group that it held patents it thought were key to the H.264 standard that was in development. The standard was developed in 2003 by a group of companies to provide better-quality high-definition video.

The votes on those two issues will be taken under advisement by U.S. District Judge Rudi Brewster, who is presiding over the case in federal court in downtown San Diego and who will ultimately decide those questions.

Qualcomm's Lupin said the company was disappointed with the verdict, particularly in the advisory votes that Qualcomm had not been forthright with the patent office and the standards-making body.

“We feel very strongly that our conduct in front of the standards body and the patent body is always candid and in compliance with the rules,” he said.

Lupin said it's too early to say if Qualcomm will appeal yesterday's decision, because Brewster still must rule on the two advisory votes.

For Broadcom, the decision could give the maker of semiconductors more clout in the larger feud between the two chip-making giants.

Michael Cohen, director of research for San Diego-based Pacific American Securities, said he believed after closing arguments that Qualcomm's patents had been infringed.

“This should be looked at that Broadcom did a good job of defending itself from Qualcomm's retaliation to Broadcom's initial attacks,” Cohen said. “I think it's very notable how fast the jury came back. It's highly unusual for a jury to come back on something this complicated on the same day they started deliberating. I think it means their minds largely were made up going in.”

In the long run, he said, it gives Qualcomm less leverage in its ongoing battle with Broadcom over how much Broadcom should pay to license Qualcomm's wireless technology that is key to cell phones.

Broadcom attorney Bob Brewer said he was very optimistic when the jury returned a verdict on the same day deliberations began.

Juror Aimee Lee Cheek said she expected days of deliberation, given the complicated evidence and obscure technology involved.

“I hope the attorneys don't feel that we didn't give them due consideration,” said the 70-year-old historian. “It did seem very fast – but we know it is a very important issue and took it very seriously.”

Cheek, who lives in the College Area, said none of the jurors walked into the jury room with their minds made up, but came to a quick consensus after reading their notes to one another and following the jury foreman's lead through the jury instructions.

Financial analyst Steve Re said he thought Qualcomm had proven its case, but that the verdict didn't surprise him.

“When I left, I had the sense that the rapport that (Broadcom lead attorney William) Lee had with the jury was just a much, much stronger one than (Qualcomm lead attorney James) Batchelder's,” said Re, president of Quality Growth Management in Rancho Santa Fe.


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