Judge rules against Qualcomm By ELLIOT SPAGAT, AP Business Writer

Judge rules against Qualcomm By ELLIOT SPAGAT, AP Business Writer
1 hour, 4 minutes ago



SAN DIEGO - A federal judge has found that Qualcomm Inc. waived its rights to enforce two patents on compressing video signals because it deliberately concealed them from an industry standard-setting group.

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The company's behavior suggests "extremely foul play" and exposes "a carefully orchestrated plan and the deadly determination of Qualcomm to achieve its goal of holding hostage the entire industry" that would use the H.264 video compression standard, wrote U.S. District Judge Rudi Brewster.

The ruling, dated Monday, came in one of several patent disputes between chipmakers Qualcomm and Broadcom Corp.

Qualcomm initiated the case, suing Broadcom in October 2005 on claims that its rival violated patents on technology that is used to compress video signals in DVD players, digital televisions and music players. Qualcomm lost at trial.

The judge said Qualcomm worked actively on the Joint Video Team standards-setting body as early as January 2002, undermining the company's claims that it did not participate until after the panel released the H.264 standard in May 2003. By concealing its patents, Qualcomm deprived other companies of a chance to reduce or avoid their dependence on them.

Brewster also said Qualcomm failed to share more than 200,000 pages of "highly relevant" documents with Broadcom until after the San Diego jury trial ended in January and Qualcomm engaged in "constant stonewalling, concealment and repeated misrepresentations" as the two sides prepared for trial. He ordered Qualcomm to pay Broadcom's attorney fees.

Qualcomm on Tuesday reiterated its apology for failing to share documents and for "the inaccurate testimony" of some of its witnesses. It denied violating rules of the standards-setting panel and said it would appeal the decision.

David Rosmann, Broadcom's vice president for intellectual property litigation, said the 54-page ruling is only one illustration of Qualcomm's misconduct.

"The court's findings indicate that this is one of the most serious and egregious cases of standards abuse and litigation misconduct that our industry has ever witnessed," he said. "While we are gratified with the court's ruling, we are also disappointed that Qualcomm chose to stoop to such tactics."

Qualcomm, based in San Diego, is the world's second-largest chip supplier for mobile phones after Texas Instruments Inc. but earns much of its money from licensing fees on its patented technology. Broadcom, based in Irvine, is a newcomer to the cell phone business but has scored several legal victories against Qualcomm this year.

On Monday, the Bush administration upheld an import ban on cell phones that contain Qualcomm chips, further clouding the introduction of new handsets from several carriers and manufacturers.

U.S. Trade Representative Susan Schwab declined to overrule the U.S. International Trade Commission's June order, which came in another patent dispute between the two companies. The commission found that Qualcomm infringed on a patent that protected Broadcom's technology to conserve battery power.

Qualcomm shares fell $1.28, or 3.1 percent, to $40.50 Tuesday. Broadcom's shares fell 68 cents, or 2 percent, to $32.76.