Broadcom wants ban of Cellphones imported with Qualcomm Chips

Broadcom Urges Ban Of Cellphone Imports With Qualcomm Chips


The chief executive of Broadcom Corp. (BRCM) urged a government panel Wednesday to bar imports of cell phones that include chips made by Qualcomm Inc. (QCOM) that infringe on its patents.

Appearing before the U.S. International Trade Commission, Scott McGregor and other Broadcom representatives said that such a ban would not hurt consumers, disrupt the wireless telecommunications market or threaten public safety, as Qualcomm and its supporters have argued.

If the ITC grants Broadcom's request, "things will continue just as they have, with the exception that a subset of cellular devices that contain infringing ... chips would no longer be available to be imported into the United States," McGregor said.

Broadcom is asking the ITC to block imports of cellphones that contain Qualcomm chips using EV-DO and WCDMA technologies, which provide fast wireless transmission of voice, data and video. EV-DO is used by Verizon Communications Inc.'s (VZ) Verizon Wireless and Sprint Nextel Corp. (S).

The chip technology at issue helps conserve cellphone battery power. An ITC administrative law judge found last year that Qualcomm's chips violated Broadcom's patents. The judge recommended that imports of the chips themselves be banned, but not cellphones that include the chips.

But Bob Van Nest, an attorney representing Broadcom, said that such a remedy would do little good, because "the vast majority" of chips that infringe on Broadcom's patent enter the United States already incorporated into handsets made by companies such as Motorola Inc. (MOT) and Samsung Corp.

The ITC is considering the administrative law judge's recommended remedy as well as Broadcom's request. The ITC must balance the proposed remedies against their impact on the broader economy and other public interest factors. The two- day hearing is the first the ITC has held on remedies in an intellectual property case since 1993.

The ITC has said it will complete its investigation by May 8. If the commission issues a remedy, the White House has 60 days to approve or disapprove it.

Shares of Qualcomm were recently trading down 33 cents, or 0.8%, to $42.71, while shares of Broadcom were down 69 cents, or 2.1%, to $32.87, both on the Nasdaq Stock Market.


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