Ban on Qualcomm handsets to stay, Qualcomm to appeal

Stuart Corner
Tuesday, 07 August 2007 08:17

IT Industry - Strategy

Qualcomm says it will appeal the ban imposed on the import to the US of handsets containing it chips - imposed by the International Trade Commission in response to Qualcomm infringing Broadcom's intellectual property - after the US trade representative declined to overturn the ban. The commission's decision to impose the ban provoked widespread protest from a broad section of US industry, claiming they would be the innocent victims of Qualcomm's wrong doing


The US Cellular Telecommunications Industry Assocation (CTIA) - a body with very broad representation from mobile carriers and handset, equipment and chip manufacturers said the ban would "cause enormous undue harm to tens of millions of American wireless consumers."

However US Trade Representative Susan Schwab declined to recommended a presidential veto of the ITC's decision saying she would uphold a long running practice not do so unless conditions were 'extraordinary'. The executive branch has overruled the ITC only five times, most recently in 1987.

In the wake of Schwab's decision, Qualcomm said it would appeal the ITC's ruling and would renew its request for a stay of the ban on imports of future handsets. It continues to maintains that none of Broadcom's patent claims are valid.

The company said it was working closely with its customers and the operators on the implementation of new software to get around Broadcom's patent claims. However the possibility remains that Broadcom could challenge this solution. Qualcomm said: "While the acceptability of this new software is subject to challenges by Broadcom, we are confident that it is outside the scope of the ITC order and we are confident in the technical performance of this software. Customer acceptance has been strong."

Qualcomm has already declined an offer from Broadcom to pay it $US6 for each infringing handset sold. However two of the largest cellular operators affected by the ban, Verizon and one other that has not been named, have don their own deals with Broadcom to enable them to continue to import infringing handsets. Verizon's move has deprived Qualcomm of a major ally in its fight against the ITC's decision.

Prior to Verizon sidestepping the ban, Qualcomm commissioned a study which estimated the cost to US consumers and the US wireless industry at between $US4.3 billion and $US21.1 billion, depending on the duration of the ban.