Qualcomm / Broadcom Battle Near Its End; Nokia Fills the Gap

By Scott M. Fulton, III | Published March 19, 2007, 6:53 PM

A stalemate was declared in the tangle of copyright claims between wireless technology providers Qualcomm and Broadcom last Friday. After both sides watched their initial claims dismissed, Qualcomm agreed to dismiss its six remaining charges against Broadcom, and Broadcom withdrew three of its claims thereafter, thus removing a sizable barrier to the evolution of wireless standards.

But seizing the opportunity, Nokia responded by filing suit against Qualcomm in the EU, claiming it no longer holds exclusive rights to technology it licensed to Texas Instruments in 2000, for chips TI sells in Europe.

The whole mess between the two wireless technology titans began in late 2005, when both companies came to blows over whether they each had rights to sell chips to handset suppliers that used technology claimed by the other.

Qualcomm's big break appeared last month, when Broadcom dropped two patent suits against it related to technology for implementing Bluetooth functionality in handset-based chips. This started evening out the score after a string of small Broadcom victories, beginning last October, when a temporary injunction request by Broadcom that would have prevented its sale of 3G cellular handsets with certain Broadcom chips in the US, was denied.

Then came the bad news for Qualcomm, which some thought could be the beginning of the end of the case it started: A US International Trade Commission judge ruled Qualcomm did infringe against one key Broadcom patent. That ruling was upheld by the ITC as a whole that December. In January, Broadcom won another round, with a ruling from a San Diego federal jury ruled Broadcom did not infringe upon two of the Qualcomm patents under dispute.

Then Broadcom dropped two of its suits, in an apparent peace offering that Qualcomm decided last week to accept. Now only two actions remain on the world's court dockets: continuing proceedings by the ITC on the patent action that was already decided against Qualcomm last year; and a dispute on Qualcomm's use of technology that Broadcom claims infringes against three of its patents, in US District Court in Santa Ana.

Nature abhors a vacuum; and sometimes the law acts like a freak of nature. This morning, Nokia sensed an opening and struck back, in an ongoing battle launched by Qualcomm against it in November 2005.

Qualcomm's original claim against Nokia is that it was upgrading two of its technologies in Europe - Global Service for Mobile Communication (GSM) and General Packet Radio Service (GPRS) - to operate at higher bandwidths. But those specific bandwidths are standards in and of themselves, Qualcomm claims, for which Nokia should seek a license, even though the older, slower bandwidths don't require one.

In patent disputes, one fights fire with fire. Nokia responded last August with counterclaims that Qualcomm should have licensed the technologies for which it wants to grant licenses to Nokia and others - specifically, GSM and Universal Mobile Telecommunications Service (UMTS). Today, Nokia's counterclaims were bolstered by the charge against the legitimacy of Qualcomm's licenses to TI.

Analysts today were advising against private investments in companies that just can't put their portfolio disputes behind them and move forward. Qualcomm stock on the NASDAQ exchange lost nearly 2% of its value today, and Broadcom stock tumbled about 1.5%, although Nokia stock on the NYSE gained about a third of a point.

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