RealTime IT News

Broadcom, Verizon Cut a Deal on Banned Phones

Verizon Wireless will continue importing mobile devices that are subject to an International Trade Commission (ITC) ban under a deal announced with Broadcom .

Under the agreement, Verizon Wireless will pay Broadcom $6 for each 1xEV-DO handset, PDA or data card sold, subject to a maximum payment of $40 million per calendar quarter and a lifetime maximum payment of $200 million.

The agreement also provides Verizon a license to the six Broadcom patents currently being litigated between Broadcom and Qualcomm. Other terms and conditions of the agreement are confidential.

The import ban follows a December 2006 ITC ruling that found celluar chips and software made by Qualcomm infringed on a Broadcom patent related to power-saving technology. The ITC then banned the import of future models of 3G mobile broadband handsets containing Qualcomm chipsets and software.

The San Diego-based Qualcomm has petitioned President Bush to overturn the decision. Verizon, Sprint, AT&T and T-Mobile USA all use Qualcomm chips in their imported handsets.

As a part of the new agreement between Verizon Wireless and Broadcom, Verizon agreed to drop its legal efforts to overturn the ITC decision, including its stay request filed with the U.S. Court of Appeals for the Federal Circuit.

The agreement also provides Verizon a license to the six Broadcom patents currently being litigated between Broadcom and Qualcomm. Other terms and conditions of the agreement are confidential.

"A market-based solution, like the one our two companies have announced today, is the most effective way to resolve these kinds of intellectual property issues," Lowell C. McAdam, president and CEO of Verizon Wireless, said in a statement.

Broadcom President and CEO Scott A. McGregor said the deal reflects "not only the strength of our intellectual property portfolio in the wireless space but also Broadcom's commitment to work constructively with other industry players to resolve I.P. disputes."

Broadcom and Verizon also announced a new strategic alliance between the two companies, including a broad-based initiative involving mobile chipsets, Bluetooth and wireless LAN solutions, GPS location technology and optical networking solutions.

"Our mutual goal is to increase the availability of new, competitive products and services for our customers," Dick Lynch, Verizon's chief technology officer, said.

The ITC case is part of a larger legal battle between Broadcom and Qualcomm.

In May, a Santa Ana, Calif., district court found Qualcomm guilty of willful infringement of three different Broadcom patents. The jury awarded Broadcom $19.6 million in damages, which may be trebled since the infringement was ruled intentional.

Earlier this year, a San Diego jury rejected Qualcomm's claims that Broadcom infringed on two Qualcomm patents involving video compression. In another lawsuit between the two companies, Broadcom claims Qualcomm has engaged in a "pattern of misconduct" across multiple technologies and through various standards bodies.