Qualcomm Gets Temporary Ban Reprieve

By Joseph Palenchar -- TWICE, 9/24/2007

SAN DIEGO — A U.S. Court of Appeals granted a stay of the International Trade Commission (ITC) ban on imports of new models of CDMA 1X EV-DO and W-CDMA phones whose Qualcomm chips were found to violate Broadcom patents.

The stay will remain in effect while the court hears Qualcomm's appeal of the ban. The court did not allow Qualcomm to import chips while the appeal is heard.

The stay applies to all third parties that filed motions seeking a stay of the ban, which included a grandfather clause that continued to allow imports of patent-violating phones already available for sale in the U.S. at the time of the ITC's June 7 decision. Those parties are Kyocera, Motorola, Samsung, Sanyo Fisher, T-Mobile, LG Electronics MobileComm and AT&T Mobility.

The potential impact of the ban could be widespread. The majority of EV-DO and W-CDMA phone models available in the United States at the time of the ITC's ruling contained the offending chipsets, carriers AT&T and Verizon have said. For W-CDMA phones, few options exist for chipsets other than Qualcomm-made chipsets, AT&T also said.

Since the ruling, however, carriers and Qualcomm have developed several strategies to bring at least some offending phones to market. Verizon Wireless, for example, secured its own licensing agreement with Broadcom, as did a second carrier that Broadcom declined to name. In addition, Sprint Nextel said it would use phones incorporating alternative technology that Qualcomm developed in the hopes of avoiding the ban.

In seeking a stay, Qualcomm and its allies contended that the third parties are "downstream users" and that the ITC lacked the authority to issue an order excluding products imported by companies other than Qualcomm.

In granting the stay, the court agreed that the third parties demonstrated "a substantial case on the merits and that the harm factors weigh in their favor."