Chipmaker Qualcomm has been handed a major legal defeat after it lost two of three claims in a patent infringement ruling involving competitor Broadcom Corp., including a bid to lift a ban on the QChat push- to-talk technology Qualcomm licenses to Sprint Nextel Corp.
The US Court of Appeals for the Federal Circuit upheld a unanimous jury verdict that Qualcomm's cellular chips and software infringed two Broadcom patents, and upheld the injunction entered by the district court on those two patents. The appeals court also rejected Qualcomm's request for a new trial. The court ruled that a third patent was invalid.
Broadcom filed the infringement case in the US District Court in Santa Ana, California, in May 2005. On 29 May 2007, a unanimous jury returned a verdict finding that Qualcomm infringed three Broadcom patents and awarded past damages to Broadcom. In 2007, the US District Court Judge James Selna issued an injunction against Qualcomm designed to stop the company from continuing its infringement of the three Broadcom patents.
In August 2008, Judge Selna found Qualcomm in contempt of his injunction by, among other things, failing to pay royalties to Broadcom on infringing QChat products. (See: Broadcom wins federal judge ruling against rival Qualcomm)
Sprint began selling QChat phones in June as part of a plan to lure customers from Verizon Wireless and AT&T Inc., the biggest U.S. carrier, by offering handsets that also function as walkie-talkies. It developed the technology with the help of Qualcomm.
Qualcomm claimed it helped Sprint without knowing Broadcom had patented a feature that uses a phone's Internet connection to deliver quick voice messages without a dial tone. Verizon Wireless is also developing its own walkie-talkie feature.
The two patents that the appeals court upheld are the US Patent No 5,657,317, which the jury found infringed by Qualcomm's EV-DO technology, and the US Patent No.6,389,010, which the jury found infringed by Qualcomm's QChat chips and software. The third patent, held invalid, is the US Patent No.6,847,686, which relates to video processing technology.
David Rosmann, vice president for intellectual property litigation at Broadcom, said: "The appeals court's decision is a major victory for Broadcom in our ongoing effort to protect our intellectual property."
''We have continued to develop workarounds related to the patents related to QChat,'' Qualcomm attorney Alex Rogers said, adding that the company is reviewing the ruling and has been seeking technology that would allow it to continue operations.
Post this verdict, Broadcom shares rose $1 to $19.39 in NASDAQ trading. Qualcomm fell 62 cents to $45.29.