Qualcomm Inc (QCOM)

[demi22]

Taken from the new Mod board:
From: peterk 9/26/2007 4:51:30 PM
of 1441

Another Win For Qual? Courtesy of SmallCapPm on Mod:

BERNSTEIN RESEARCH


Qualcomm wins another one vs. Broadcom. The Broadcomm vs. Qualcomm story at the Santa Ana
Federal Court took another turn this week, as the court agreed to reopen its finding of "willful
infringement" by Qualcomm, in light of a higher court's ruling in an IPR case that clarified and tightened
the definition of "willful". The court will begin to consider arguments to set aside its previous judgement
for doubled damages of $38.2M at a hearing on October 15th. Meanwhile, hearings on Broadcom's
request for an injunction will be delayed pending the outcome of this hearing, which could require
repeating the penalty phase, or even the whole trial. Now, even in the very unlikely case that Broadcom
could win an injunction, it would not be granted for several months and would likely be stayed pending
appeal, which would render the point largely moot. With the threat of an injunction effectively neutered,
we believe Qualcomm gains the upper hand in negotiations with Broadcom, likely forcing a settlement at
favorable terms sooner rather than later.


• ITC action against Nokia has no downside for Qualcomm. Meanwhile, Qualcomm began arguments
in its ITC complaint against Nokia. Qualcomm is asserting that ten of its patents are infringed by Nokia
GSM and WCDMA products and is asking the ITC to embargo the importation of these handsets into the
United States. Should this embargo be granted, it would greatly increase the leverage that Qualcomm has
in its licensing negotiations with Nokia, as Nokia has made the U.S. market a strategic priority and such
an embargo would make impossible for the company to compete. Should the ITC decline to impose an
embargo, the relative negotiating positions would be unchanged. We continue to believe that the balance
of power in these negotiations favors Qualcomm, but that the two companies may wait for several
ancillary legal skirmishes, such as this ITC complaint or arbitration over whether the companies' previous
pact has been implicitly extended, to reach initial judgment before completing their negotiations