Qualcomm Inc (QCOM)

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Qualcomm hits back at Broadcom's unfair license claims
7th July 2005
By CBR Staff Writer

http://www.cbronline.com/article_news.asp?guid=40E51412-4545-4E5D-AD51-46031700687E

Qualcomm Inc has hit back at the antitrust action filed by Broadcom Corp. It said the claim that it has refused to license its essential patents on "fair and reasonable terms" is belied by the fact that it has granted more than 130 licenses to a broad range of companies.
AdvertisementIt said that these licenses, including agreements with the largest and most sophisticated manufacturers of wireless telecommunications equipment, make its patents the most extensively licensed portfolio in the cellular industry. It also said its extensive licensing program has fostered the widespread adoption of its leading-edge technologies and promoted "vibrant competition" throughout the wireless industry.

It said Qualcomm has supplied only a small percentage of the WCDMA chipsets. "The inability of Broadcom to attract customers for its WCDMA products, as admitted in Broadcom's complaint, is indicative of this highly competitive environment and not of any ostensible anticompetitive activity by Qualcomm," it said in a statement.

However, it made no reference to the market in CDMA chipsets, which is the strongest part of Broadcom's case and where it claims that Qualcomm has a 90% market share.

Qualcomm general counsel Louis Lupin said that because Broadcom does not hold essential patents for the important cellular standards, it must feel compelled to resort to these kinds of measures rather than continuing to negotiate for licenses in good faith. "Broadcom's unfortunate preference for the litigation forum rather than the negotiating table will require Qualcomm to proceed with litigation of its own," he said.

Qualcomm said Broadcom has a history of initiating litigation and International Trade Commission proceedings that do not turn out well for the company. Its patent litigation and ITC proceedings against Intel resulted in Broadcom paying Intel a $60m settlement in 2003. Similarly, it said that while Broadcom filed patent claims against Microtune Inc, the outcome was a $22.5m settlement payment in 2004 from Broadcom to Microtune. Broadcom's patent-infringement claims against Agere Inc suffered a similar fate with Broadcom reporting a $27.5m charge to settle that litigation late last year.

Broadcom alleges that Qualcomm's licensing practices on cellular technology violated US antitrust laws and keep handset prices unnecessarily high.