Qualcomm and Broadcom settled their long-standing bitter patent dispute by reaching an agreement that dismisses all lawsuits between the two companies, including all infringement claims in the International Trade Commission and the U.S. District Court of Santa Ana. Broadcom has also withdrawn complaints it filed with the European Commission and the Korea Fair Trade Commission.
According to the agreement, the companies have granted certain rights to each other under their respective patent portfolios. Qualcomm will pay Broadcom $891 million over a four-year period. The terms of this agreement will not result in any change to Qualcomm's 3G and 4G licensing revenue model, according to the companies.
The two companies have been in dispute for years over several patents, each scoring victories in various courts. Most notably, the ITC in 2007 banned the import of new cell phones made with Qualcomm 1xEV-DO and WCDMA chipsets. The ITC said those chipsets infringe upon patents held by Broadcom. Those patents covered power management features in certain 3G wireless phones. In 2008, a federal appeals court vacated the ruling, saying the ITC had over-stepped its authority when it barred the companies from importing 3G phones with the infringing Qualcomm chips.
Last week, Qualcomm postponed the release of its second-quarter earnings report pending negotiations with Broadcom, saying a resolution would have an impact on its earnings. Qualcomm $891 million in payments to Broadcom will begin with $200 million paid in the quarter ending June 30. The agreement does not provide for any other scheduled payments between the parties. Qualcomm has rescheduled its earnings conference call for 5 a.m. PT on April 27.
For more:
- see this release
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