TI Counter Sues QUALCOMM Over Royalties

Texas Instruments Tuesday filed a counter suit in Delaware Chancery Court against QUALCOMM saying the wireless giant breached a contract between the two companies.

The claim is a direct reply to a QUALCOMM suit filed against TI on July 25 in the same court over the issue of confidentiality of the agreement. On September 8, TI asked the Delaware courts to dismiss the suit, but the court has not yet ruled on the motion. The patent portfolio agreement between TI and QUALCOMM was originally forged back in December 2000 and is set to expire in 2005.

Dallas-based TI’s lawsuit asks the court for an order to require QUALCOMM to adhere to the terms of a cross-licensing agreement between the two companies and for an injunction to prohibit QUALCOMM from making “false or misleading statements about the parties’ respective rights and obligations.” TI said it has filed the complaint under seal since it refers to certain non-public sections of the agreement that describe the extent to which TI and QUALCOMM may pass through chipset licenses to CDMA handset manufacturers.

“We brought this action because we have received reports that QUALCOMM is offering handset royalty discounts to handset manufacturers only if they purchase CDMA chipsets from QUALCOMM,” TI Senior Vice President and General Counsel Joseph Hubach said in a statement. “We are asking the Delaware court to enforce the terms of the agreement.”

A spokesperson for the San Diego-based wireless giant had not seen the complaint and declined to comment on the pending case.

Ever since inking the deal back in 200, the two companies have had a healthy competition. That changed in May when, TI threw down the gauntlet saying it will “expand its presence” in the CDMA market — a space QUALCOMM rules with an iron fist since it created the technology.

TI is currently working on its upcoming CDMA2000 products and said it is on track to produce a single-chip cell phone, “with all of a cell phone’s key functions integrated onto one chip” by the end of 2004.

TI stock rose 70 cents to $24.15 in afternoon trading. QUALCOMM eked out an additional 35 cents to sell at $44.97 per stock.