Federal District Court Rules on Alleged Violations of Injunction

(Business News & Technology News, 1 Sep 2008)

The District Court for the Central District of California issued a ruling on Broadcom Corp.'s motion to find Qualcomm Inc. in contempt of various aspects of the Court's December 31, 2007 injunction ruling arising from the underlying trial last May.

While the Court found that Qualcomm had not violated the order on most of the issues raised by Broadcom, and while the Court declined to enjoin Qualcomm from continuing to make and sell WCDMA chips that implement a design around, the Court did find certain violations.

The Court found that Qualcomm violated the injunction by continuing to service and support WCDMA products that were made and sold between the date of the trial verdict in May and the date the injunction first issued on December 31, 2007. Qualcomm interpreted the order as requiring it to pay royalties on such products and provided service and support in reliance on that interpretation. The Court disagreed and a new accounting will require Broadcom to return the royalty payments. The Court also ruled that Qualcomm employees must stop using phones containing the WCDMA chips sold between May and December. Qualcomm is permitted to continue to service and support all WCDMA products containing the design around and all products containing chips sold before the verdict.

The Court also found that Qualcomm violated the injunction with respect to service, support and exclusivity payments related to version 3.0 of its QChat software. While Qualcomm has not sold version 3.0 since the date of the injunction, and has released a design-around version of QChat, the Court found that the U.S. revenue associated with version 3.0 service, support and exclusivity was subject to royalty payments. The Court's order now requires Qualcomm to pay profits related to that revenue.

While Qualcomm appreciates that the Court found in favor of Qualcomm on most issues, it will appeal those issues on which the Court has ruled against it.

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