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Chip makers reach settlement
Source: Agencies |
April 28, 2009, Tuesday
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Print Edition
Print Edition
CHIP maker Qualcomm Inc said on late Sunday that it will pay Broadcom Corp US$891 million over four years to settle a long-standing dispute over patents and royalties.
The company said it will pay US$200 million of the settlement in the quarter ending June 30. The agreement dismisses with prejudice all litigation between the companies, including overseas, with Broadcom agreeing to withdraw its complaints to the European Commission and the Korea Fair Trade Commission.
Qualcomm said the terms of the agreement won't change its 3G and 4G licensing revenue model. The company's chips are used in many of the world's cell phones, and it also licenses technology to wireless communications companies.
Under the agreement, the companies have granted certain patent rights to each other, however, neither company's customers receive rights to patents related to chip products incorporated into non-cell phone products and equipment.
"The settlement will allow us to direct our full attention and resources to continuing to innovate, improving our competitive position in this economic downturn," said Paul E. Jacobs, chairman of Qualcomm.
"We have set aside our differences while addressing the needs of our customers, our shareholders and the industry," said Scott A. McGregor, president and CEO of Broadcom.
The settlement ends years of litigation between the companies, in which Broadcom had sued Qualcomm alleging its rival was misusing its patents to suppress competition. In May 2007, Broadcom won US$19.6 million, after a jury found Qualcomm had violated three of its chip patents.
The company said it will pay US$200 million of the settlement in the quarter ending June 30. The agreement dismisses with prejudice all litigation between the companies, including overseas, with Broadcom agreeing to withdraw its complaints to the European Commission and the Korea Fair Trade Commission.
Qualcomm said the terms of the agreement won't change its 3G and 4G licensing revenue model. The company's chips are used in many of the world's cell phones, and it also licenses technology to wireless communications companies.
Under the agreement, the companies have granted certain patent rights to each other, however, neither company's customers receive rights to patents related to chip products incorporated into non-cell phone products and equipment.
"The settlement will allow us to direct our full attention and resources to continuing to innovate, improving our competitive position in this economic downturn," said Paul E. Jacobs, chairman of Qualcomm.
"We have set aside our differences while addressing the needs of our customers, our shareholders and the industry," said Scott A. McGregor, president and CEO of Broadcom.
The settlement ends years of litigation between the companies, in which Broadcom had sued Qualcomm alleging its rival was misusing its patents to suppress competition. In May 2007, Broadcom won US$19.6 million, after a jury found Qualcomm had violated three of its chip patents.
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