Appeals court rejects Qualcomm request

The U.S. Court of Appeals for the Federal Circuit on Friday rejected Qualcomm's request to delay an import ban on new mobile devices containing the company's chips, which the International Trade Commission ruled infringe on patents held by rival chipmaker Broadcom Corp. Qualcomm argued for the stay on grounds that President Bush is mulling a veto of the ITC ban, but the court countered it cannot issue a stay during the 60-day presidential review period that ends August 6. "The Court of Appeals for the Federal Circuit denied the request for stay on a procedural basis that the issue was not ripe for their consideration until after the passage of the presidential review period," Qualcomm spokeswoman Emily Kilpatrick told the San Diego Union-Tribune. "It made no determination of the substantive merits of the stay request, and the parties are free to renew their request for a stay if the president does not veto the ITC decision."

Qualcomm said that it will re-file its appeal for a stay if Bush does not veto the ITC order. In addition to support from wireless industry heavyweights including AT&T, Sprint Nextel and T-Mobile, Qualcomm's veto push also gained backing from public safety agencies, who argue the ban could impact emergency communications, as well as five Republican members of the U.S. House Energy and Commerce Committee. The ITC order "will stifle the efforts of wireless carriers to deliver cutting-edge technologies to American consumers," wrote Deputy United States Trade Representative Susan Schwab last week in a letter also signed by Reps. Joe Barton of Texas and Cliff Stearns of Florida.

Qualcomm nevertheless lost a key ally Thursday when Verizon Wireless announced a licensing deal with Broadcom, agreeing to pay the chipmaker $6 for each handset that ships with patent-infringing Qualcomm technology. Verizon will pay out a maximum of $40 million a quarter, or $200 million over the life of the agreement; the deal also gives the carrier license to five other Broadcom patents also subject to legal wrangling. The Broadcom deal effectively puts to rest questions about Verizon's right to introduce new handset models; in a subsequent press release, Qualcomm called the Verizon/Broadcom license agreement "a positive development," adding it "removes uncertainty…by ensuring that Verizon Wireless will be able to continue to sell wireless broadband products powered by Qualcomm's chipsets and software." The release couldn't resist a jab at Broadcom, however, stating "the announced economic terms are far less drastic than any terms previously demanded by Broadcom from Qualcomm."

Not all of the news is quite so bleak for Qualcomm, however: On Monday the chipmaker announced a royalty-free agreement with Telechips enabling the Korean semiconductor company to incorporate patented Qualcomm technologies to design, manufacture and sell semiconductor chip products implementing the FLO air interface mobile TV standard. "With the demand for affordable multimedia content growing, Qualcomm is pleased to have executed multiple FLO chip agreements in rapid succession since the inception of its FLO chip program last year," said Qualcomm Technology Licensing president Marv Blecker in a prepared statement. "This agreement will allow Telechips to provide its customers with high-quality FLO chips that enable delivery of a superior mobile broadcast experience combining live streaming TV, on-demand programming and a host of interactive services."

For more on Qualcomm's appeals court setback:
- read this San Diego Union-Tribune article

For more on the Qualcomm/Telechips FLO agreement:
- read this release

Related articles:
- Qualcomm rejects Broadcom settlement offer
- Qualcomm/Broadcom: Sizing up the lobbyists