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US bans import of Qualcomm 3G phones

Comeuppance from Broadcom

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The US International Trade Commission has barred the import of new cell phones that use chips made Qualcomm, following a legal determination they infringe a patent held by competitor Broadcom.

The ban includes the import of Qualcomm chips and chipsets, but doesn't affect handsets and PDAs on the market prior to today's ruling, according to a news release issued by the federal agency. The chips at issue are used in a variety of 3G phones such as those operating on networks run by Verizon, Sprint, and AT&T.

The White House now has 60 days to approve or overturn the ruling, according to the Associated Press. Qualcomm could settle the patent dispute with Broadcom or could appeal today's decision to a federal court.

Qualcomm representatives didn't immediately return a call seeking comment.

If lawyers among Qualcomm's intellectual property ranks have glum faces there is good reason. Most recently, a federal jury awarded Broadcom $19.6m after finding Qualcomm chip designs infringed three patents. That judgment could be tripled to almost $60m under patent rules that provide for stiff penalties when the infringement is deemed to be willful. Not to be outdone, Nokia, Texas Instruments, NEC, Panasonic and Ericsson have all filed complaints with the European Commission, accusing Qualcomm of violating competition law through its licensing practices.

Today's action represents a compromise between remedies proposed by Broadcom, which had sought a ban on all devices that use the infringing chips regardless of when they were put on the market, and an ITC administrative judge, who favored blocking only the chips and chipsets themselves.

In taking the middle ground, a majority of the commission determined that barring only new phones would reduce burdens that otherwise would have been imposed on third parties while still "affording meaningful relief to the patent holder".

The ban stems from a June, 2005 investigation the ITC commenced in response to a complaint Broadcom filed alleging a patent it held for mobile device capabilities and power management was infringed by Qualcomm. In October 2006, an administrative law judge ruled in favor of Broadcom and recommended an import ban of Qualcomm chips into the US. ®

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