Phone Makers May Import Qualcomm Chips

A federal appeals court judge has ruled phone makers like Motorola, LG, and Samsung can resume importing phones containing Qualcomm chips which infringe on Broadcom patents.

Legal battles over patents are almost always long and complex, and the patent rift between chipmakers Broadcom and Qualcomm has taken another turn as Judge Haldane Mayer on the U.S. Court of Appeals for the Federal Circuit granted a stay in an exclusion order which banned companies from importing Qualcomm chips into the U.S. which have been found to infringe on Broadcom patents. The catch is who the judge granted the stay to: the phone makers LG, Samsung, T-Mobile, Kyocera, Sanyo Fisher, AT&T, and Motorola who incorporate Qualcomm’s chips into their phones. Qualcomm itself, however, is still barred from bringing the contested chips into the United States under a ban from the International Trade Commission.

The ITC barred imports of phone models with certain Qualcomm chips after determining those chips infringed on a Broadcom patent related to power-conservation technology. In August, the White House refused to intervene and let the ban stand.

Needless to say, the two companies’ interpretations of the ruling couldn’t be more opposite, with Qualcomm trumpeting that the court "granted a stay pending appeal that will allow third parties to import handsets into the United States," while Broadcom gloats the appeals court "denied a request by Qualcomm Incorporated (Nasdaq: QCOM) to stay the effectiveness pending appeal of a U.S. International Trade Commission (ITC) exclusion order." Both are technically correct: third parties can resume importing phones using the contested chips until Qualcomm’s appeal of the patent infringement ruling winds through the judicial system, and Broadcom is correct that Qualcomm still can’t import its own chips into the United States.

The ruling is not a reversal of the original finding that Qualcomm’s chips infringe on Broadcom patents—if that comes, it’ll only be at the end off a lengthy appeals process. However, it does enable the seven companies mentioned in the judge’s ruling to resume importing phones using the Qualcomm chips; the companies had argued the ban unfairly harmed them, since they were not named in the lawsuit and had acted in good faith. The ban mostly applied to high-end phones with high-speed wireless data capabilities.

The ruling does not specifically mention Sprint Nextel, which had largely avoided the import ban by using phones with alternative technology which is not impacted by the import ban. Verizon Wireless avoided being impacted by the import ban by cutting its own deal with Broadcom back in July.