Broadcom, Qualcomm disagree on standard setting IPR policy
By Suzanne Deffree -- 3/23/2007
Signs that Broadcom Corp. and Qualcomm Inc. were easing up on their legal disputes earlier this week were bucked by separate announcements from the companies Thursday afternoon, each claiming a form of victory in a patent battle between the communications chipmaker rivals.
In its statement, Broadcom announced that a federal district court adopted a unanimous jury finding that Qualcomm “violated its duty” to disclose patents to an industry standards body, and thereby waived its rights to enforce two patents Qualcomm alleged covered the H.264 video compression standard.
However, in Qualcomm’s statement, the company said that the federal judge ruled that “the court finds no clear and convincing evidence of inequitable conduct” by Qualcomm in obtaining the two patents.
Qualcomm’s statement also claimed that the judge ruled the company’s disclosure of its ownership of patents related to digital video signal technology and essential to the H.264 video encoding standard created by the Joint Video Team (JVT) standardization group “was not timely in light of what he found to be the unwritten expectations of the group's members.”
According to Broadcom and conflicting with statements from Qualcomm Thursday, the jury also rendered advisory verdicts that Qualcomm committed “inequitable conduct before the United States Patent and Trade Office, and that Qualcomm knowingly violated a duty to disclose its patents to the JVT, or its parent organization, during the JVT's preparation and eventual adoption of the H.264 video compression standard.”
Unsurprisingly, the two companies disagree on what the judge’s finding means. According to Broadcom, Qualcomm waived its rights to enforce the '104 and '767 patents against H.264 products and also put other company’s in a situation where Qualcomm could block the use of the published H.264 standard unless the company obtained a separate license.
“Such an undesirable consequence is likely one factor behind the basis for the Federal Circuit ruling in Rambus, which the court applies in this case," the court’s opinion document reads, according to Broadcom’s statement. In 2006, The FTC found that Rambus was monopolizing some memory markets and concluded that Rambus distorted a critical standard-setting process and engaged in "an anticompetitive 'hold up' of the computer memory industry" through a "course of deceptive conduct."
However, Qualcomm’s statement, heavily relying on what was written and unwritten, said: “The court did not find that Qualcomm had violated any provision of the JVT's written intellectual property policy, but rather that a duty to make an earlier disclosure arose from his conclusion that the JVT members considered themselves obligated to make IPR [intellectual property rights] declarations in circumstances not mandated by the written IPR policy.”
Broadcom minced no words in describing the court’s most recent finding. "We are pleased that the court agreed with the jury's recommendation on standards abuse and believe the evidence that came to light in this case is illustrative of Qualcomm's ongoing abuse of the rules of industry standards bodies," David A. Dull, Broadcom's senior VP and general counsel, said in the company’s statement. "It confirms what the industry has long suspected: that Qualcomm does not shoot straight with standards bodies. We are continuing to examine their conduct before various cellular and other standards bodies."
Meanwhile, Qualcomm’s general counsel’s stance is that, if it wasn’t in writing, the company should not be held accountable.
“We are very troubled … by the judge's finding that an obligation to make IPR declarations may arise in the standard setting environment from members' 'understandings' not expressed in the standard setting organization's written IPR policy,” Lou Lupin, Qualcomm's general counsel, said in the company’s statement. “Such a rule would leave companies whose businesses require them to participate in standardization efforts in the untenable position of having to guess what their disclosure obligations might be. We respectfully disagree with the court's reasoning that strict compliance with a standards body's written IPR policy is not enough. We also believe that, even if such an unwritten obligation could arise when the standards body members all considered themselves to be so obligated, all evidence here was that the JVT participants did not.”
The San Diego Court is scheduled to hear argument on the findings on May 2.
These most recent findings affect claims between the two companies that were among a handful of legal wranglings not covered by an arrangement between the two companies early this week that saw Qualcomm reach agreements with Broadcom to dismiss without prejudice all of its patent-related claims and counterclaims, and to dismiss with prejudice all trade secret misappropriation claims asserted by either party in two lawsuits that were pending in San Diego federal court.
Also unaffected by the duo’s arrangement is a United States International Trade Commission (ITC) judge ruling that Qualcomm's cellular baseband chips infringe five claims of a Broadcom patent. In May, the U.S. District Court in Santa Ana, Calif., is scheduled to try Broadcom's claims that Qualcomm infringes three additional of its patents relating to cellular technology. Broadcom said it will later litigate in the Santa Ana court the same three patents that were tried last year in the ITC.
Separately, Broadcom and five other mobile wireless technology companies filed complaints in October 2005 with the European Commission alleging that Qualcomm has engaged in anticompetitive conduct in the licensing of its patents and the sale of its chipsets for mobile wireless devices and systems. Broadcom and other wireless technology companies filed similar complaints before the Korean Fair Trade Commission in July 2006.
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