ITC upholds ban on Qualcomm chips

By Colleen Taylor, Contributing Editor -- Electronic News, 6/22/2007

The U.S. International Trade Commission (ITC) has denied Qualcomm Inc.'s  request to stay the effectiveness of the its recent exclusion order, which bans the importation into the United States of certain Qualcomm chips and cellular phones that have been found to infringe a patent owned by Broadcom Corp.

Last year, an ITC administrative law judge, and later the commission itself, found that Qualcomm's cellular baseband chips infringe five claims of U.S. Patent No. 6,714,983, which relates generally to power conservation in cellular phones.

On June 7, the ITC issued its final determination and ordered that the infringing Qualcomm chips, and future downstream products such as 3G cellular phones that incorporate those chips, be barred from importation into the United States. The ITC also entered a cease and desist order prohibiting Qualcomm from engaging in certain activities related to the infringing chips.

While Broadcom supported the ITC's decision to ban the Qualcomm products, Qualcomm, unsurprisingly, was opposed to the ruling. Following the final determination, Qualcomm maintained its stance that Broadcom's patent is invalid and not infringed. It also asked the ITC and the federal circuit court of appeals to stay enforcement of the ITC's order, and announced plans to ask President Bush to veto the ITC's decision. As of today, the ITC has denied Qualcomm's request. The company has not yet said whether its other attempts at squelching the ban have been effective.

Reps at Qualcomm were not available for immediate comment on the ITC's decision.

For its part, Broadcom is satisfied with the ITC's upholding of the ban so far.  "As we have said before, Broadcom simply wants to be adequately compensated for the use of our intellectual property and to be able to compete fairly in the cellular markets on the merits and innovation of our products and technologies, as we do in every other market in which we compete," David A. Dull, Broadcom's senior VP and general counsel, said in a statement. "We have repeatedly communicated to Qualcomm our readiness to negotiate a lasting resolution to these issues, thus far to no avail. The burden of resolving these matters rests squarely with Qualcomm."

And despite Qualcomm's claims that the ITC's ban "will limit consumer choice and access to mobile broadband services, be harmful to operators, manufacturers and the economy, and pose risks to public safety communications," some analysts have predicted that the measure will have only a short term, limited impact on the global wireless communications industry. In addition, market research firm iSuppli Corp. said earlier this month, the ban could actually benefit some mobile phone products—namely, Apple Inc.'s iPhone, which will be offered to consumers in the United States on June 29. Some of the advanced mobile phones impacted by the ITC ban were expected to compete directly with iPhone, iSuppli said, which could create challenges for carriers planning to offer these competing phones, while boosting the outlook for AT&T, which will sell the iPhone in the United States.