Business Tech

Qualcomm and Broadcom announced Sunday that they have agreed to end patent litigation between the companies worldwide, with Qualcomm paying Broadcom $891 million, according to the announcement.

On Wednesday, Qualcomm delayed its second-quarter earnings statement, citing advanced settlement discussions with Broadcom.

Qualcomm made this statement Sunday: "Qualcomm and Broadcom today announced that they have entered into a settlement and multi-year patent agreement. The agreement will result in the dismissal with prejudice of all litigation between the companies, including all patent infringement claims in the International Trade Commission and U.S. District Court in Santa Ana, as well as the withdrawal by Broadcom of its complaints to the European Commission and the Korea Fair Trade Commission."

Qualcomm will pay Broadcom $891 million over a four-year period, according to the San Diego-based company. The terms of the agreement will not result in any change to Qualcomm's 3G (CDMA2000, WCDMA, and TD-SCDMA technologies) and 4G (LTE and WiMAX technologies) licensing revenue model, Qualcomm said.

The agreement stipulates, among other things, that Broadcom and Qualcomm agree not to assert patents against each other for their respective integrated circuit products and certain other products and services and Broadcom agrees not to assert its patents against Qualcomm's customers for Qualcomm's integrated circuit products incorporated into cellular products.

"We believe that this resolution is positive for both Qualcomm and Broadcom, our customers, our partners and the overall industry," Paul E. Jacobs, chairman and CEO of Qualcomm, and Scott A. McGregor, president and CEO of Broadcom, said in a joint statement.

"The settlement will allow us to direct our full attention and resources to continuing to innovate, improving our competitive position in this economic downturn, and growing demand for wireless products and services," Jacobs said.

The agreement ends longstanding litigation between the companies. For its part, Broadcom had argued in one case that Qualcomm was unfairly limiting competition by putting onerous conditions in its patent licensing agreements. Qualcomm licensed its chipset patents to other chip suppliers with the stipulation that they must limit sales of their products to mobile handset makers that also have Qualcomm patent licenses.

Broadcom had also asserted that the cloud of litigation hanging over it was a sticking point for prospective customers--and did win a judgment against Qualcomm in 2007. Qualcomm, however, had won court rulings of its own, having suits against it dismissed.

Qualcomm has delayed its second-quarter earnings statement because of advanced settlement discussions with Broadcom, the company said Wednesday.

Qualcomm is delaying its earnings statement until Monday due to discussions with Broadcom "regarding a global settlement of all disputes between the parties which, if reached, would have an impact on the Qualcomm's financial results for the fiscal second quarter," the company said.

Revenue and operating income for the second quarter of fiscal 2009, excluding the potential impact of the Broadcom agreement, met or exceeded prior guidance, Qualcomm said.

In related news, on March 16, the U.S. District Court for the Southern District of California granted Qualcomm's motion to dismiss a lawsuit brought by Broadcom seeking a declaration that Qualcomm's patents are exhausted and unenforceable.

In that ruling, the U.S. District Court held that Broadcom failed to show it was entitled to declaratory relief because it did not identify any specific patents that were allegedly exhausted, or an exhaustion triggering sale or license, according to a Qualcomm statement. The court also ruled that Broadcom's purported injuries were too speculative to support the claims alleged.

Broadcom had argued that Qualcomm was unfairly limiting competition by putting onerous conditions in its patent licensing agreements. Qualcomm licensed its chipset patents to other chip suppliers with the stipulation that they must limit sales of their products to mobile handset makers that also have Qualcomm patent licenses.

Broadcom on Monday announced a chip integrating 802.11n Wi-Fi, Bluetooth, and FM radio into a single silicon die, a move designed to expand the range of features available in mid-range mobile-phone handsets.

The introduction of the BCM4329 was motivated in part by the increased popularity of Wi-Fi in mid-range "feature phones," Broadcom said. It added that this growth is due in turn to the integration of cameras, browsers, and audio capabilities into more handsets, which is driving a need for transferring data and media between handsets and other electronics such as TVs, PCs, printers, remote speakers, and car stereos.

The chip is one of the first to offer the 802.11n Wi-Fi standard in a package suitable for mobile devices. It promises wireless throughput of up to 50Mbps, allowing large files to be transferred quickly, Broadcom said.

Broadcom's chip uses single-stream 802.11n, because the space, battery power and processing power restrictions in mobile devices would not support the multiple-antenna implementation used in larger 802.11n devices, according to the company. Even so, Broadcom said the single-stream design delivers faster and more reliable wireless connections than current 802.11g products.

The chip uses space-time block coding (STBC), a feature designed to improve connection robustness. It also has dual-band 802.11n capabilities, meaning handset owners can use the less-crowded 5GHz spectrum for applications that require faster guaranteed bandwidth.

In addition, the chip's FM transmit and receive capabilities are intended to allow music to be streamed directly from media players or mobile phones to car stereos or home stereo systems.

The chip's Bluetooth implementation includes algorithms intended to improve the co-existence of Bluetooth and Wi-Fi, and also uses a shared antenna system to minimize interference between the two technologies.

Integrating all the technologies on to a single die takes up less space and power than discrete chip implementations, Broadcom said.

The company's previous combination chips include the BCM4325, integrating Bluetooth, FM radio, and an earlier generation of Wi-Fi, and the BCM2049 Bluetooth/FM chip.

The chip is currently shipping in small quantities to some customers and will be manufactured in production quantities next year, Broadcom said.

Matthew Broersma of ZDNet UK reported from London.

Broadcom on Tuesday said that it completed the acquisition of Advanced Micro Devices' digital TV chip business--at a discount to the original price.

On August 25, the two companies announced a price for the unit of $192.8 million. But Broadcom now expects that AMD's digital TV business will have fourth-quarter revenue of between $15 million and $20 million, lower than previously expected, the Irvine, Calif.-based company said.

Accordingly, the price has been slashed to $141.5 million, about a 27 percent reduction from the original price.

Broadcom had said in August that AMD's DTV unit would strengthen its own digital TV system business by expanding the tier-one customer base. Broadcom offers digital chips for TVs, including digital TV system-on-chip solutions.

AMD sold the unit to Broadcom to become "leaner and more focused" as it faced a string of quarterly losses and needed to create a "business model to deliver sustainable profitability and leadership in core x86 computing and graphics businesses," the company said.

Updated at 11:34 a.m. PT to include Broadcom statement

A U.S. appellate court has reversed an import ban on certain cell phones with chips made by Qualcomm, ruling that the U.S. International Trade Commission overstepped its authority in a 2007 decision.

Last year, the ITC ruled that certain new models of 3G wireless handsets with Qualcomm chipsets because they infringed on a Broadcom patent. An appellate court stayed the ban in September, pending appeal.

On Tuesday, the U.S. Court of Appeals for the Federal Circuit issued its decision (PDF). The appellate court upheld the ITC's ruling about the patent's validity. However, it reversed the import ban because Broadcom filed a complaint only against Qualcomm. The ITC could not ban products made by "downstream manufacturers who were not named as respondents in Broadcom's initial complaint," the appellate court ruled.

"Qualcomm is very pleased with the court's opinion," Don Rosenberg, Qualcomm's general counsel, said in a statement. "In effect, the court has disapproved Broadcom's tactic of attacking the wireless industry, including handset manufacturers and wireless operators, without providing them with the opportunity to defend themselves in the action."

In a statement, Broadcom said the company was "pleased that the Court affirmed our patent's validity, the infringement by Qualcomm's customers and the validity of the ITC's claim construction."

"In light of that, we believe that Qualcomm's continued use of our patented technology would certainly meet the new standard of intent and be found to infringe," the company said.

For years, Qualcomm and Broadcom have been engaged in legal battles over various patents. Earlier this month, Broadcom sued Qualcomm in the U.S. District Court for the Southern District of California, alleging that Qualcomm's sales and licensing practices amount to patent misuse.

Broadcom is paying $192.8 million in cash to acquire Advanced Micro Devices' digital television business, the companies said Monday.

AMD's DTV assets include Xilleon integrated DTV processors and reference designs, NXT receiver ICs, the Theater 300 DTV processor, and a line of panel processors that perform advanced motion compensation, frame rate conversion and scaling.

AMD had announced last month that it was quitting the DTV market, as part of an effort to streamline its businesses. CEO Dirk Meyer said in a press release that the sale was a "key step" toward helping the company boost its financial performance.

Roughly 530 AMD employees working for the DTV business will be "invited to join Broadcom" as part of the sale, which has been approved by both companies' boards of directors.