Broadcom wins appeal against Qualcomm

Broadcom Corp. will proceed with an antitrust action against Qualcomm Corp. over deceptive conduct before a standards-setting body after an appeals court reversed a lower court that had dismissed its claims.
The U.S. Court of Appeals for the Third Circuit yesterday ruled that the Broadcom case presented “important questions regarding whether a patent holder’s deceptive conduct before a private standards-setting organization may be condemned under the antitrust laws.”
The appeals court cleared the way for Broadcom’s action to proceed in the U.S. District Court for New Jersey, finding that Broadcom had adequately alleged that Qualcomm “possessed monopoly power in the relevant market.”
Qualcomm retorted yesterday that the appeals court had dismissed six of Broadcom’s eight claims and allowed only two to proceed to district court. The appeals court was bound by procedure to accept as true Broadcom’s two remaining allegations, according to Qualcomm.
“Qualcomm vigorously disputes Broadcom’s remaining allegations and is confident that judgment will ultimately be entered in its favor on the entire complaint,” Qualcomm said in a press release.
Qualcomm’ stock was down slightly after the news to around $39 per share. Broadcom’s stock was also down slightly to around $35 per share.
The Institute of Electrical and Electronics Engineers and VMEbus International Trade Association both filed supporting briefs in Broadcom’s appeal.
Broadcom filed its original case on July 1, 2005, alleging that Qualcomm had abused the standards-setting process, failed to license its technology on fair, reasonable and non-discriminatory terms and had engaged in other anticompetitive actions. The district court granted Qualcomm’s motion to dismiss in August 2006.