Mannerisms

The latest twist in the Qualcomm vs Broadcom legal saga, is that a federal judge in California ruled this week that Qualcomm can keep selling chips whose designs infringe Broadcom patents in return for royalties until Janauary 2009 but, after that date, Qualcomm is permanently barred from infringing those Broadcom patents.

In another decision, announced after Christmas, Qualcomm got an injuction preventing Broadom from using improperly obtained trade Qualcomm trade secrets, including source code, and also preventing Broadcom from making any further efforts to obtain more Qualcomm trade secrets.

And in a a third legal decision, announced before Christmas, US trade regulator, the ITC, announced that it will look into whether Qualcomm is violating the ITC’s order not to import chips which infringe Broadcom patents, after Qualcomm said it had done a ‘workaround’ to get round Broadcom’s IP.

This ‘workaround’ claim is disputed by Broadcom which says the workaround doesn’t work round its patents, and Qualcomm’s chips still infringe them.

It seems that Broadcom and Qualcomm have got their teeth into eachother in a legal war which looks like being as bitter and protracted as the Intel vs AMD legal battles of the 1990s.

“Our competitor in San Diego makes a percentage royalty on a handset”, says Broadcom CEO Scott McGregor, “it’s the same percentage if you make the handset out of plastic or out of platinum. There must be a million patents behind a cellphone. What happens if anyone who owns one of these thinks he can shake down the industry by charging 3 per cent royalty on a handset?”

It’s thought that Qualcomm charges between three and five per cent royalty on the cost of a handset which uses its CDMA technology.

This is despite the fact that Qualcomm undertook to license its technology on ‘fair, reasonable and non-discriminatory terms’.

According to McGregor, Qualcomm offers its customers a lower royalty rate on condition they buy Qualcomm’s chips. McGregor characterises that as: “Unfair trading practices to keep people out of the market.” Clearly the practice fails the ‘non-discriminatory’ criterion.

Meanwhile, the latest development in the LTE vs Wimax vs LTE candidiacies to get adopted as a 4G standard comes in a report from ABI Research which says that Qualcomm has failed to get is candidate for 4G, Ultra Mobile Broadband (UMB), adopted by any operator even on a trial basis.

UMB technology is expected to be available in 2009 and is competing to be a 4G wireless technology against LTE (adopted by Vodafone and Verizon) and against Wimax (which has over 50 commercial deployments).