Qualcomm Wins Stay of Chip Import Ban

Seven mobile phone companies can temporarily continue importing handsets and other wireless devices with Qualcomm 3G chips, a federal appeals court said Sept. 12.

The ITC (International Trade Commission) ordered a ban on the products June 7 after determining Qualcomm infringed on a power-saving patent held by Broadcom.

But in a rare legal victory this year for San Diego-based Qualcomm, the Court of Appeals for the Federal Circuit ordered a stay of the ban for third parties using Qualcomm chips since Broadcom, of Irvine, Calif., had filed the ITC complaint against only Qualcomm. The court made no determination on the validity of the Broadcom patents or Qualcomms infringement.

The decision does not affect ITCs order banning Qualcomm itself from bringing infringing chips into the United States. The import ban includes baseband processor chips that comprise Qualcomms core suite of enhanced multimedia and convergence handset platforms.

Qualcomm, meanwhile, will continue to pursue the appeal of the ITCs order and seek a reversal of the underlying infringement finding. When the ban was issued, Qualcomm, in addition to its appeal, unsuccessfully sought a White House reversal of the order.

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The original ITC ban affected all future cell phones, PDAs, broadband cards and other similar devices intended for consumer use. However, the ITC excluded existing models of such devices from the ban, allowing cell phones already on the market to continue to be sold.

"We are pleased that the Court of Appeals recognized the undeserved harm to parties who were not named in the lawsuit, and that our customers will continue to be able to introduce new products into the U.S. marketplace during the appeals process," Alex H. Rogers, Qualcomms senior vice president and legal counsel, said in a statement.

Third parties freed of the ban pending Qualcomms appeal include AT&T, T-Mobile, Motorola, Kyocera, Samsung, Sanyo and LG Electronics. In granting the stay, the appeals court said the third parties demonstrated "a substantial case on the merits and that the harm factors weigh in their favor."

Verizon Wireless skirted the ban by signing a licensing agreement with Broadcom in July. Sprint Nextel imports and sells cell phones that use alternative power-saving technology.

Broadcoms Senior Vice President and General Counsel David Dull said in a statement, "We look forward to an expedited process in the appeal and believe that the stay will be lifted for all parties."

The bitter dispute between Qualcomm and Broadcom spans a number of infringement and antitrust lawsuits and countersuits.

In May, a Santa Ana, Calif., federal jury ordered Qualcomm to pay $19.6 million for willfully infringing on three Broadcom patents. The presiding judge then doubled the award and ordered Qualcomm to pay Broadcoms legal fees in the case. A decision on Broadcoms request for a permanent injunction on products using the three patents is expected later this month.

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