Qualcomm Inc (QCOM)

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Court won't dismiss Qualcomm suit against Texas Instruments
1 hour, 25 minutes ago


A court has decided not to dismiss a breach of contract lawsuit filed by Qualcomm Inc. against Texas Instruments Inc., the chipmakers said Wednesday, making it likely the dispute will go to trial in May or June.

Texas Instruments (NYSE: TXN - news) had asked the Delaware Court of Chancery to dismiss Qualcomm (Nasdaq: QCOM - news) claims that TI reneged on a patent portfolio contract inked four years ago. That motion was reportedly denied on Monday.


TI Senior Vice President and General Counsel Joe Hubach said his company intends to re-file its motion to dismiss as a motion for summary judgment once more documents have been submitted.


In a statement issued Wednesday, TI indicated that Chancellor William Chandler wrote, "At the present time, there are so few facts before the court that it cannot conclude that the alleged breach of the confidentiality provision is immaterial."


Qualcomm, in a separate statement Wednesday, excerpted from the court opinion that Qualcomm "has alleged facts that, if accepted as true, may support a finding that the breach of the contract is so substantial that it defeats the object of the parties in making the contract."


Qualcomm spokespeople declined further comment on the case Wednesday, citing the ongoing nature of the litigation.


TI spokeswoman Gail Chandler, no relation to the judge, said: "This is not a ruling on the merits of the case and it doesn't address at all our claims against Qualcomm."


The court has indicated it could try the case in May or June of this year, according to TI.


San Diego's Qualcomm is represented by internal counsel and Wilmington, Del.-based Morris, Nichols, Arsht and Tunnell. Dallas-based TI is represented by internal counsel along with Wilmington, Del.-based Richards Layton and Finger and Cleveland, Ohio-based Jones Day.


Qualcomm initially filed a breach of contract lawsuit in July of last year against TI in Delaware Superior Court, alleging that Texas Instruments violated the confidentiality of a December 2000 cross-licensing deal. Qualcomm asked for undisclosed damages and that Texas Instruments' rights under the pact be terminated.


TI responded by filing an action in Chancery Court, asking that Qualcomm be required to adhere to terms of the licensing deal, and for an injunction that would prohibit Qualcomm from making false or misleading statements about the companies' rights and obligations.


Qualcomm voluntarily pulled its lawsuit from the Superior Court and re-filed with the Chancery Court, to which TI filed a motion for dismissal.


The Delaware Court of Chancery adjudicates disputes involving Delaware corporations and other business entities.


TI has suggested that Qualcomm's lawsuit was motivated by Texas Instruments' May 2003 announcement that it would begin providing its customers with samples of handset chips that use CDMA (news - web sites) technology, a wireless standard already heavily patented by Qualcomm. CDMA is an acronym for Code Division Multiple Access.


TI began sampling some of the CDMA chipsets to handset manufacturers in December.


Separately on Wednesday, Qualcomm Executive Vice President Paul Jacobs on a visit to India reportedly said the company might set up a business unit there. Qualcomm spokeswoman Bertha Agia confirmed that the India unit would be a research and development center for the development, design and support of CDMA hardware and software. No timeline for establishing the potential site has been disclosed, she said.


Qualcomm's stock price has been on a steady incline in recent months, from just under $30 in May to Wednesday's new 52-week high of $65.04. The company's market capitalization is about $52.11 billion.


Similarly, TI's stock price has climbed from $15.98 to $33.98 in the 52-week period, trading as high as $29.92 on Wednesday. Its market capitalization is pegged at $51.54 billion.


Related Link:

Delaware Court of Chancery: courts.state.de.us/chancery

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