Court Awards Broadcom Double Damages in Qualcomm Patent Infringement Case

Broadcom Corporation (Nasdaq: BRCM), a global leader in semiconductors for wired and wireless communications, announced that a U.S. District Court judge in Santa Ana, Calif. has ordered Qualcomm Incorporated (Nasdaq: QCOM) to pay double damages of $39.3 million for past infringement of three Broadcom patents. The judge also ordered Qualcomm to pay Broadcom’s attorneys’ fees in the litigation.

An injunction hearing in the case, in which Broadcom is seeking to bar future infringement of the patents by Qualcomm, is scheduled to begin Tuesday.

In May, a federal jury in Santa Ana found that Qualcomm had “willfully infringed” the three Broadcom patents, and awarded Broadcom $19.64 million in damages. The “willfulness” finding provided the judge with the discretion to increase the damages. In doubling the amount of damages initially awarded by the jury, U.S. District Judge James V. Selna reasoned, “There is a spectrum of improper conduct for determining the amount to award. That Qualcomm’s conduct was not at the most egregious end of the spectrum does not mean that no enhanced award is due.” He found awarding the attorneys’ fees “appropriate for the same reasons as the damages enhancement. Broadcom has demonstrated that this case is exceptional by clear and convincing evidence.” Judge Selna issued a tentative ruling on the awards August 9; today he made the order final.

Today’s ruling follows two other recent adverse decisions involving Qualcomm:

  • On August 7, a U.S. District Court judge in San Diego found that Qualcomm engaged in “aggravated litigation misconduct” and “intentional abuse of industry standards bodies” in an infringement case it brought involving two digital video compression patents. As a result, he ruled that Qualcomm had waived its rights to enforce the patents and also awarded Broadcom its attorneys’ fees and costs in that case. Citing Qualcomm’s litigation misconduct, a magistrate judge in the same court today ordered fourteen outside attorneys for Qualcomm to appear at an August 29 hearing to address the issue of sanctions.
  • On August 6, the Bush Administration let stand a June 6 U.S. International Trade Commission (ITC) order barring the importation of certain Qualcomm chips that infringe a Broadcom patent and future downstream products such as cellular phones that incorporate those chips.

“We’ve demonstrated again and again that Qualcomm cannot sell its chips without a license to Broadcom’s patents,” said David A. Dull, Broadcom’s Senior Vice President and General Counsel. “We will continue to aggressively seek all available remedies to shut down that infringement.”

Other Litigation
In April 2007 Broadcom filed a complaint in California state court against Qualcomm asserting unfair competition, fraud and breach of contract claims related to Qualcomm’s abuse of the intellectual property rules of various industry standards-setting bodies. The complaint alleges that Qualcomm has engaged in a pattern of misconduct across multiple technologies and multiple standards bodies, including those responsible for setting cellular, video, and mobile broadband standards, and that Qualcomm’s misconduct includes improperly concealing its patents, reneging on licensing obligations, and exerting dominance through hidden affiliations.

Broadcom has also joined five other leading mobile wireless technology companies in filing complaints with the European Commission alleging that Qualcomm has engaged in anticompetitive conduct in the licensing of its patents and the sale of its chipsets for mobile wireless devices and systems. The six companies assert that Qualcomm is violating EU competition law and failing to meet the commitments it made to international standards bodies to license its technology on fair, reasonable and non-discriminatory terms. Broadcom and other wireless technology companies have filed similar complaints before the Korean Fair Trade Commission. Broadcom is also appealing last year’s dismissal of its federal antitrust lawsuit against Qualcomm. The dismissal, by a U.S. District Judge in New Jersey, was appealed to the U.S. Court of Appeals for the Third Circuit. A hearing was held in June, and the parties await a ruling by the appellate court.

While Broadcom continues to pursue its claims against Qualcomm regarding patent infringement, anti-competitive behavior and fraud issues, Qualcomm has either lost or withdrawn all of its claims against Broadcom.

About Broadcom
Broadcom Corporation is a major technology innovator and global leader in semiconductors for wired and wireless communications. Broadcom products enable the delivery of voice, video, data and multimedia to and throughout the home, the office and the mobile environment. We provide the industry’s broadest portfolio of state-of-the-art, system-on-a-chip and software solutions to manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices. These solutions support our core mission: Connecting everything(R).

Broadcom is one of the world’s largest fabless semiconductor companies, with 2006 revenue of $3.67 billion, and holds over 2,200 U.S. and 900 foreign patents, more than 6,600 additional pending patent applications, and one of the broadest intellectual property portfolios addressing both wired and wireless transmission of voice, video and data. Broadcom is headquartered in Irvine, Calif., and has offices and research facilities in North America, Asia and Europe. Broadcom may be contacted at +1.949.926.5900.

Broadcom(R), the pulse logo, Connecting everything(R) and the Connecting everything logo are among the trademarks of Broadcom Corporation and/or its affiliates in the United States, certain other countries and/or the EU. Qualcomm(R) is a trademark of Qualcomm Incorporated.