ITC’s 3G ban stands, Qualcomm appeals

The president passed and Qualcomm Inc. is heading to court.
A 60-day window closed yesterday for a presidential veto of the U.S. International Trade Commission’s June 7 ban on the importation of new 3G handsets containing Qualcomm Inc.’s chips. Now, the company will turn to a federal appeals court to seek a stay of the ITC’s ban and reversal of the agency’s decision and remedy in the case.
Qualcomm yesterday continued to insist that Broadcom Corp.’s patent claim was invalid and, therefore, Qualcomm did not infringe on it. Its request to the appeals court for a stay of the ban had been denied on procedural grounds while the president could still veto the ITC’s decision and remedy.
The market sent the stocks of both chip companies down more than 1% on the news.
The San Diego-based chip vendor also reiterated that it had devised “work around” software for its carrier and handset customers that it was “confident” would work and not be subject to the ITC ban. Broadcom, however, could still challenge the importation of handsets containing the work around, which may lead to more settlement agreements between U.S. carriers and Broadcom.
Meanwhile, the partial ban goes into effect today. It is expected to forestall the importation of new 3G handsets to at least two of the nation’s four major carriers as the third quarter-typically marked by upgrade purchases of advanced devices-is nearly half over. Verizon Wireless cut a deal with Broadcom to avoid the ban and, according to media reports, a second, as-yet-unnamed carrier has also made a deal.
Earlier this year, the ITC ruled that Qualcomm’s W-CDMA chips infringe on a valid Broadcom patent for power management. On June 7, the ITC revealed its remedy: a ban on new 3G handsets containing Qualcomm’s chips. Similar handsets already on sale by that date are not affected.
In another apparent setback to Qualcomm, the company today acknowledged a federal judge’s finding in San Diego that the company had waived its rights to enforce two patents related to a video compression standard used in high-definition products such as set-top cable and satellite television boxes and related gear. The judge said that Qualcomm had deliberately concealed two patents from a standards-setting body and, therefore, was ineligible to sue Broadcom for violation of those patents, as it had. The judge also said that Qualcomm had failed to produce thousands of documents relevant to the case during a trial over the matter. Qualcomm was directed to pay Broadcom’s costs in the suit.
Qualcomm acknowledged the “seriousness” of the judge’s findings and apologized for its “errors,” but said it disagreed with the court’s conclusions and would appeal the case.