The Bush administration on Monday declined to overturn the International Trade Commission's ban on importing mobile devices containing Qualcomm chips found to violate patents controlled by rival Broadcom. Barring judicial intervention, the import ban will go into effect Tuesday, according to U.S. Trade Representative Susan C. Schwab. "In this case, after carefully weighing these considerations, advice from agencies, and information received from interested parties, I have decided to permit the limited exclusion order and cease and desist order that the USITC issued in its investigation," Schwab said in a statement issued late Monday.
Qualcomm actively lobbied President Bush to reject the ban, recommended in June after the ITC determined that some Qualcomm EVDO chips, chipsets and circuit board modules infringed on Broadcom's intellectual property holdings. Per U.S. trade laws, the president is empowered to overturn ITC rulings, although such cases are extremely rare. Qualcomm's sole remaining hope is to successfully petition a federal appeals court to overturn the ITC's decision--in a statement released in the wake of the White House's decision, Qualcomm CEO Paul Jacobs said, "We will pursue all legal and technical options available to us to minimize the impact of the ITC order on consumers, our customers and the entire wireless industry."
Short of a last-minute appeals court reprieve, it seems probable Qualcomm will be forced to negotiate a long-term settlement with Broadcom. Despite support from its carrier partners and wireless industry association CTIA, Qualcomm's bargaining power is virtually nil--in mid-July, Verizon Wireless inked a deal to pay Broadcom $6.00 for each 1xEV-DO handset, PDA or data card including the contested technology, with a maximum payment of $40 million per calendar quarter and a lifetime maximum payment of $200 million. The agreement also provides Verizon a license to the six Broadcom patents in question.
For more on the Bush decision:
-read this Forbes article