WASHINGTON – A
federal commission has agreed to look into a complaint by
Broadcom alleging that Qualcomm violated a ban on
importing wireless chips that infringe on a Broadcom
The U.S. International Trade Commission is opening an
investigation into the allegations, the latest development
in an ongoing legal battle between the two companies, the
agency said yesterday.
Broadcom claims that Qualcomm, a San Diego chip-making
giant, is continuing to market the chips on its Web site
even though the ITC ordered the company to stop importing
or selling the chips.
Qualcomm has challenged the ban in the U.S. Court of
Appeals for the Federal Circuit in Washington, D.C.
The chips have been widely used in wireless handsets to
conserve power when the phones are out of range of a
Broadcom, based in Irvine, also accuses Qualcomm of
testing the infringing chips in violation of the order.
Qualcomm denied the allegations in papers filed with
the ITC, an independent federal trade agency.
“Qualcomm has conducted its business in such a way as
to ensure that it has carefully complied with the terms”
of the order, the company said in a letter sent to the
commission Dec. 5.
In papers filed with the commission, Qualcomm faulted
Broadcom for failing to present any evidence that it has
violated the ban.
Qualcomm said the chips it markets on its Web site have
been modified, removing the technology that the commission
determined infringe on a Broadcom design.
Qualcomm also said it has developed a “work-around” for
its chips, enabling it to manufacture chips that no longer
contain the Broadcom features.
The commission barred Qualcomm from importing
infringing chips in June, after determining that it had
copied the Broadcom design.
The commission also prohibited the import of new
handsets containing the chips – a blow to cell phone
manufacturers – but a federal appeals court judge
temporarily suspended that order in September.
In its filing before the commission, Broadcom taunted
Qualcomm, saying the company's refusal to “prove” that its
redesigned chip does not infringe on Broadcom's patent
indicates “the redesigned chip still infringes.”
Qualcomm responded that it has no obligation “to report
to Broadcom about new designs it has implemented.”
Mark McKechnie, an analyst with American Technology
Research in San Francisco, said the dispute appears to be
of minor significance since Qualcomm imports few chips.
But for Broadcom, he said, “at least 'getting them' on
the chip side would cause Qualcomm an inconvenience.”
Broadcom has asked the commission to fine Qualcomm
$100,000 for each day it has imported infringing chips.
The two companies have been increasingly at odds since
Broadcom expanded into chip making and technology for
Qualcomm shares rose 84 cents, or 2.19 percent, to
close at $39.12 on the Nasdaq. They rose 3 cents after
Broadcom shares rose 48 cents, or 1.82 percent, to
$26.84 on the Nasdaq. They rose 14 cents after hours.