Federal Judge Says Qualcomm in Contempt—Again

11/18/08Follow @bvbigelow

A federal judge in Santa Ana ruled yesterday that San Diego’s Qualcomm is in contempt of an order he issued in December to prevent Qualcomm from infringing on two patents held by rival Broadcom of Irvine, CA.

The ruling is the latest salvo in a continuing legal battle that involves at least four lawsuits between the rival Southern California chipmakers over patents covering various chip designs.
In a statement issued this morning, Broadcom’s David Rosmann pounced on the implications of the ruling, saying, “This is the second time that Qualcomm has been found in contempt of the same federal court injunction.”

U.S. District Judge James Selna issued a similar contempt order in August, declaring there was “clear and convincing evidence” showing that Qualcomm had defied his Dec. 31 order.

In his statement, Rosmann, Broadcom’s vice president for intellectual property litigation, said provocatively that “Qualcomm’s ongoing contempt reflects a remarkable disregard for a system meant to protect intellectual property rights.”

But in his order, Selna notes that he did not impose monetary sanctions on Qualcomm “in light of remedial efforts” Qualcomm has undertaken. Just the same, Selna rejected Qualcomm’s continuing legal argument, which is that the company should only be held liable to pay royalties to Broadcom where Qualcomm’s patent-infringing chips were installed in a radio unit, i.e., a wireless phone. Selna says Qualcomm is liable for the chipsets, period.

The judge ordered Qualcomm to pay Broadcom its gross profits within 60 days on any infringing chips that cannot be recovered or destroyed. Selna also ordered Qualcomm to pay Broadcom’s attorneys fees in the matter.

The injunction Selna issued in December prohibits Qualcomm from making, using, selling, importing, and developing certain next-generation chips capable of operating on CDMA2000 and EV-DO networks. The injunction also provides a sunset period that allows Qualcomm to continue to sell legacy EV-DO chips to certain customers through January 31, 2009, provided that it pays a royalty to Broadcom.

In its statement today, Broadcom says Judge Selna found that Qualcomm violated both provisions of the injunction by selling and offering to sell the prohibited EV-DO chips and by failing to pay royalties on legacy EV-DO chips..

The dispute arises from an infringement suit that Broadcom filed against Qualcomm in 2005. A Santa Ana federal jury determined in 2007 that Qualcomm had infringed on three fundamental patents held by Broadcom and awarded $19.64 million in damages for past infringement.

Qualcomm has appealed that case and in a statement issued this afternoon, Qualcomm’s seems to take the defiant position that—despite the 2007 verdict—the company can’t be found in contempt if did not infringe on Broadcom’s patents.

“As the court recognized, the outcome of this issue turns on a legal question of whether there can be a violation of the court’s injunction in the absence of an infringement or acts leading to infringement,” Qualcomm said. “We respectfully disagree with the court’s conclusions. We are analyzing our options.”

In a separate ruling yesterday, Selna granted Qualcomm’s request to amend counterclaims it has filed against Broadcom in the case. And so the battle rages on.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

By posting a comment, you agree to our terms and conditions.