Broadcom cleared of patent infringement claims

By Colleen Taylor -- 1/29/2007

Wireless communications technology company Broadcom Corp. announced Friday that a federal jury in San Diego found the company had not infringed two patents for digital video compression owned by Qualcomm Inc.

The nine member U.S. District Court jury reached its unanimous verdict after six hours of deliberation, rejecting Qualcomm's claims of infringement following a nine day trial that included testimony from multiple experts as well as the companies' chairmen, Broadcom co-founder Henry Samueli and Qualcomm co-founder Irwin Jacobs, according to Broadcom.

In addition to finding the two patents not infringed, in an advisory opinion to the presiding judge the jury found that Qualcomm violated a duty to disclose its patents to the Joint Video Team (JVT), or its parent organization, during the JVT's preparation and eventual adoption of the video compression industry standard known as the H.264 standard, Broadcom said.

In a second advisory opinion to the judge, Broadcom added, the jury found that Qualcomm committed inequitable conduct before the U.S. Patent and Trademark Office (USPTO).

Broadcom and Qualcomm are no strangers to the courtroom. The companies have been embroiled in a bevy of patent and intellectual property battles for years. Most recently, in December the United States International Trade Commission (ITC) judge ruled that Qualcomm's cellular baseband chips infringe one of three Broadcom patents the company had claimed were infringed. The ITC action was the first of several patent disputes between the companies to go to trial.

Reps at Qualcomm were not available for immediate comment.

Qualcomm will face trial on two more of the Broadcom patents in March in San Diego, and on five more in May in Santa Ana, Calif. Altogether, Broadcom currently has infringement claims from 14 different patents awaiting trial against Qualcomm.

In other good news for Broadcom and its investors last week, Nasdaq's listing qualifications panel notified the company that it has regained compliance for the listing of its stock in the market. Broadcom's listing had been threatened because it had delayed filing regulatory forms to the Securities and Exchange Commission (SEC) while it conducted an internal review of its stock option granting practices amid the recent industry-wide crackdown on illegal backdating. Last week the company filed its amended and delayed 2005 annual and 2006 quarterly reports with the SEC, bringing the company current in its required SEC filings. The filings include restated financial statements with total net additional charges of $2.22 billion for illegally backdated stock option grants.

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