Bush Administration Upholds ITC Ban on Importation of Mobile Phones with Qualcomm Chips

(Top News, 7 Aug 2007)

The Bush Administration has decided to let stand the U.S. International Trade Commission (ITC) order barring the importation of Qualcomm Inc. chips and certain cellular phones containing those chips that infringe a Broadcom patent.

"We are gratified by the decision of U.S. Trade Representative Susan Schwab not to intervene in this case," said David A. Dull, Broadcom Corp.'s Senior Vice President and General Counsel. "This decision strengthens the intellectual property rights of all U.S. companies, not just Broadcom, and sends a clear message to all those who would seek to escape the consequences of their patent infringement. In upholding the ITC remedy, the Administration is also encouraging a market-based solution to patent issues that is in the best interests of American consumers, U.S. companies and global patent protection."

The ITC remedy announced on June 7 was the measured and fair outcome of a two-year investigative process, according to Dull. He added: "The comprehensive 60-day interagency review of the ITC order involved senior policy experts from a wide range of Executive Branch agencies, including the Office of the Trade Representative, the Treasury Department, the Department of Homeland Security, the Commerce Department and the State Department, among others. Clearly, this senior level review charged to protect the public interest fully weighed all the issues, separating fact from assertion, and just as the ITC did, concluded that protecting intellectual property rights best served that interest."

"According to the IEEE Spectrum, Broadcom possesses one of the world's most powerful semiconductor patent portfolios," Dull said. "We absolutely must protect our portfolio from the pervasive infringement in which Qualcomm has been found to engage. At the same time, our licensing and strategic alliance agreement with Verizon Communications, announced July 19, demonstrates that Broadcom is willing to work constructively to resolve intellectual property disputes. We hope the White House decision will encourage Qualcomm to resolve this and our other disputes through prompt negotiations with Broadcom."

Last year, an ITC administrative law judge and later the Commission, in a unanimous ruling, found that Qualcomm's cellular baseband chips infringe five claims of Broadcom's U.S. Patent No. 6,714,983, which relates generally to power conservation in cellular phones. On June 7, 2007, the six-member Commission issued its Final Determination on a remedy for Qualcomm's infringement, ordering that certain Qualcomm chips that infringe the patent, and future downstream products such as cellular phones that incorporate those chips, be barred from importation into the United States.

The ITC's June 7 order was subject to a 60-day Presidential review period, which involved extensive review by U.S. Trade Representative Susan Schwab, who the President had previously designated to decide whether to let the ITC order stand or to overturn it through a statutory disapproval.

To date, Qualcomm has been found to infringe four different Broadcom patents, one tried in the ITC and three others tried before a federal jury in May in Santa Ana, Calif. The Santa Ana jury found Qualcomm's infringement of the three Broadcom patents to be willful. An injunction hearing in that case, in which Broadcom is seeking to bar future infringement by Qualcomm, is set for August 14.

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