Court allows importation of handsets originally banned in Qualcomm-Broadcom patent battle

By Colleen Taylor, Contributing Editor and Suzanne Deffree, News Editor -- Electronic News, 9/13/2007

In a rare bit of good legal news for embattled wireless technology provider Qualcomm Inc., the United States Court of Appeals for the Federal Circuit on Thursday granted a stay pending appeal that will allow third parties to import handsets into the United States originally previously banned by the International Trade Commission (ITC).

The stay applies to all third parties that filed motions seeking a stay of the limited exclusion order imposed by the ITC on June 7. According to Qualcomm, those parties were Kyocera Wireless Corp., Motorola Inc., Samsung Electronics Corp. Ltd., Sanyo Fisher Co., T-Mobile USA Inc., LG Electronics MobileComm U.S.A. Inc., and AT&T Mobility LLC.

The ITC had imposed the importation ban as a remedy after finding that Qualcomm had infringed a patent held by Broadcom relating to a power-saving technique. Qualcomm sought a presidential veto of the ITC's order; however, last month the Bush Administration opted to let the order stand.

Broadcom had filed the complaint in the ITC against only Qualcomm, leading Qualcomm and the third parties that are "downstream users" to argue that the ITC lacked the authority to issue an order excluding products imported by persons other than Qualcomm. In granting the stay, Qualcomm said the court agreed that the third parties demonstrated "a substantial case on the merits and that the harm factors weigh in their favor."

"We are pleased that the Court of Appeals recognized the undeserved harm to parties who were not named in the lawsuit, and that our customers will continue to be able to introduce new products into the U.S. marketplace during the appeals process," Alex H. Rogers, senior VP and legal counsel for Qualcomm, said in a statement.

Meanwhile, Broadcom also was “pleased” by the ruling, although for different reasons. While the stay applies to third parties, the court declined to grant a stay with respect to Qualcomm's own imports.

"We are pleased that Qualcomm will not be permitted to continue its infringement of our patent while the appeal proceeds, either as to its original design or its purported redesign," said David A. Dull, Broadcom's senior VP and general counsel, in a company statement. "We look forward to an expedited process in the appeal, and believe that the stay will eventually be lifted for all parties."

Qualcomm said it will continue to pursue the appeal of the ITC's order and seek a reversal of the underlying infringement finding.