Qualcomm is going to have to pay a licensing fee to its competitor Broadcom for a patent. For several weeksQualcomm had been hoping that the Bush administration would come to its rescue and reverse a decision that would mean it had to pay the licensing fee. But the administration has let the decision,made in June by the United States International Trade Commission, stand. It was felt that the decision could have a major impact on the cell phone industry,since it could lead to a ban on the importation of millions of new phones that use Broadcom’s power management technology. However, two major carriers, including Verizon, have reached deals with Broadcom. San Diego-based Qualcomm makes chips for phones used by Verizon Wireless, Sprint and AT&T. Its argument is that the $6 a phone licensing fee demanded by Broadcom is excessive. Broadcom, whose home is inIrvine, California, said that Qualcomm was using its power management technology without paying royalties. A pending lawsuit was suspended to await a decision by the U.S. Trade Representative. But Susan C. Schwab, U.S. Trade Representative, has upheld the ruling in Broadcom’s favour. Qualcomm plans to appeal for anemergency stay of the ruling to the United States Circuit Court of Appeals for the District of Columbia. “We’re obviously disappointed but not terribly surprised,”saidQualcomm’s general counsel Lou Lupin of the decision. Broadcom will seek an immediate enforcement of the ruling, which they claim will only affect 10% of phones, none of which are yet on themarket.
