San Diego-based Illumina (NASDAQ: ILMN) and its Solexa subsidiary are countersuing Carlbad, CA-based Life Technologies (NASDAQ: LIFE) and Applied Biosystems in a patent dispute over gene sequencing technologies. In a statement today, Illumina and Solexa denied allegations that Life and Applied Biosystems raise in their Sept. 21 lawsuit, assert that Applied Biosystems’ patents are invalid, and allege that Life is infringing on four Solexa patents. A Life spokesman says, “We believe these claims are without merit and we will vigorously defend our intellectual property.”

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In what is shaping up as the battle of San Diego’s biotechnology tools titans, Life Technologies (NASDAQ: LIFE) has filed a patent-infringement suit against rival Illumina, claiming that some of Illumina’s best-selling genetic-sequencing products violate Life Tech’s intellectual property.

The suit, filed in U.S. District Court in Delaware, claims that certain Illumina products, including the Genome Analyzer and the second-generation Genome Analyzer II, infringe upon three Life Tech patents. The suit seeks an unspecified amount in damages, and a permanent injunction restraining Illumina (NASDAQ: ILMN) from further infringement. If granted, the injunction would prevent Illumina from selling its equipment.

Telephone and e-mail messages to an Illumina spokesperson were not returned.

Illumina’s Genome Analyzer products are a mainstay of the company’s genetics analysis business, and are important to Illumina’s growth. The $50,000 whole-genome analysis that Illumina began offering to the public in June uses the Genome Analyzer. The company has stated that one of its corporate goals is to make the Genome Analyzer the industry standard for genetic analysis. Last year, the device accounted for the bulk of Illumina’s $64.8 million increase in instrument sales.

Life Technologies, formed last November through the merger of Invitrogen and Applied Biosystems, claims it is the leader in the genetic sequencing business. The Carlsbad, CA-based company had revenue of $3.1 billion in 2008, dwarfing Illumina’s 2008 revenue of $570 million.

Listed as plaintiffs along with Life Tech are patent owners Alexander Chetverin and Helena Chetverina, both of Russia; The Institute for Protein Research of the Russian Academy of Sciences; and William Hone of New York. According to the suit, the patents cover certain methods of amplifying and expressing nucleic acid, a building block of DNA. Applied Biosystems had an exclusive license to the patents, which issued in the late 1990s.

Illumina subsidiary Solexa is also named as a defendant.

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Seattle-based Cray (NASDAQ: CRAY), the supercomputing company, announced late last week it has acquired the PathScale Compiler Suite assets from Maynard, MA-based SiCortex. Financial details were not released. SiCortex shut down in May. The purchase could help Cray improve its own compiler technology, as well as give PathScale customers a way to move forward on Cray supercomputers.

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On snowy days in certain neighborhoods of our great city it is not unusual for someone to put an old trash can in an on-street parking space that they have recently cleared. We all know there is threat implied: if you take the spot, you will regret it. Given the effort expended to clear the spot, the person who did all the work may feel justified in blocking others from taking it. But we all know that this tends to screw things up for everyone. Pretty soon cars circling looking for parking spaces clog the roads, and nobody can get home, even if they have blocked a spot.

This is a textbook example of the classic “tragedy of the commons” problem, in which following our personal self-interest eventually screws things up for everyone.

I believe the use of non-competes falls into the same category. By laying claim to our best employees, and keeping them from working for others, our economy becomes less agile, many of our best employees get tied up in what may not be the best job for them, and their only option is to move to a state that prohibits non-competes.

Don’t get me wrong. I use non-competes in my business, and nearly everyone else I know does, too. Non-competes are in our individual self-interest. The problem is just that they probably aren’t in our collective interest.

In states where non-competes are unenforceable, such as California, we know from our brethren there that employees rapidly gain experience, moving from company to company in quick succession. One of the results of this is that the best people quickly flock to the best companies as they start to show promise. This may be one reason that the world’s tech powerhouses like Google and Cisco disproportionately come from California.

While one could argue that banning non-competes hurts California companies individually, empirical evidence seems to suggest that the system benefits to society collectively outweigh this. In addition to the observation that the Googles and Ciscos of the world tend to grow more commonly in California, it also appears that investors are most happy to put their money there. Venture capital investment there has grown much faster there in the past decade than it has in Massachusetts, reaching a level now that is about three times that of Massachusetts.

This problem is not just theoretical. It is practical, and personal. Twice in the last few months, I have seen cases where great employees were prevented from working for the company that could make the best use of their talents. In one of these cases, the current employer was effectively out of business, although not yet legally dissolved, and for reportedly emotional reasons suggested it would litigate if the employee in question moved to a healthier company in the same industry. This scared off the new employer, who simply didn’t want the legal risk. The employee had to switch industries to take a new job.

Years ago, one of our executives left my employ at Cambridge Innovation Center. I was somewhat concerned that he would help others compete with us, and I reminded him of his non-compete. Not long after, I learned he had moved to California. While this may have benefitted my firm, it was clearly not good for Massachusetts.

I believe movement from company to company is a form of innovation pollination, and we should encourage it. It is time for our lawmakers to ban non-competes.

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Microsoft’s IP Ventures program announced today it has launched a new startup called InishTech, based in Dublin, Ireland. The company will handle Microsoft’s Software Licensing and Protection Services, an existing business since 2007. Microsoft is providing an undisclosed amount of startup funding, as well as support through its BizSpark program. Its IP Ventures program has previously helped launch startups like Seattle-based Zumobi.

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Illumina (NASDAQ: ILMN), the San Diego-based developer of genetic analysis systems, said today it has filed a patent infringement suit in federal court in Madison, WI, against Affymetrix (NASDAQ: AFFX), the Santa Clara, CA-based maker of semiconductor-based “GeneChip” technology.

The suit asserts that a variety of array plate products and a related scanner sold by Affymetrix infringe on a patent Illumina was awarded earlier this year for “making and using composite arrays for the detection of a plurality of target analytes.” An array plate enables scientists to analyze many gene samples at the same time. Illumina, which refers to the patent issued March 31st, as the “841″ patent, wants a federal judge to prevent Affymetrix from making and selling its plate arrays, and for unspecified monetary damages.

In a filing submitted today to the SEC, Affymetrix said Illumina’s “claims are without merit” and added that the Northern California company “will vigorously defend against them.” Affymetrix and Illumina last year settled a patent dispute when Illumina agreed to pay $90 million to Affymetrix without admitting fault.

MIT and E8 Pharmaceuticals, a biotech formed by two Boston professors, filed a patent suit against Affymetrix last July that alleged Affymetrix was infringing on another patent, the “228″ patent. As Xconomy reported, MIT professor and E8 co-founder David Housman, a pioneer in forensic DNA analysis, compared their patent filing with an Affymetrix’ product manual, saying, “they are one and the same thing.”

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Jim Torina, the co-founder and former CEO of Bellevue, WA-based Talyst, is raising a venture fund and launching a startup incubator called The University Funds, also in Bellevue. The news was first reported by PE Hub. The seed-stage fund is looking to work with Washington State University and other institutions to build companies around universities’ intellectual property. The size of the fund has not been disclosed.

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San Diego wireless giant Qualcomm (NASDAQ: QCOM) and Irvine, CA-based Broadcom (NASDAQ: BRCM) said last night they have agreed to end their wide-ranging patent war and enter a broad cross-licensing deal.

As part of the global settlement, which terminates litigation in federal court as well as formal disputes before trade commissions in Europe and South Korea, Qualcomm has agreed to pay Broadcom $891 million over the next four years. Qualcomm says its first payment, for $200 million, will be paid to Broadcom before June 30.

That could put a ding in Qualcomm’s net income next quarter, but it seems doubtful shareholders will mind. A J.P. Morgan analyst said last week that settlement payments would have little impact on Qualcomm’s future earnings.

When Qualcomm announced Wednesday that it was postponing the release of its earnings for the second that ended in March (because it was in advanced settlement talks with Broadcom), the San Diego company added it would meet or exceed its prior guidance for quarterly revenue and operating income (excluding the cost of its deal with Broadcom.) In last year’s second quarter, Qualcomm reported operating income of $766 million on $2.6 billion in revenue—and the company said earlier this year it expected second-quarter revenue to fall between $2.25 billion and $2.45 billion.

The agreement also relieves both Broadcom and Qualcomm of substantial legal costs—in a battle where Qualcomm wasn’t faring particularly well. The company suffered its worst setback in mid-2007 when San Diego federal judge Rudi Brewster issued a blistering, 54-page ruling that found Qualcomm and its trial counsel had committed “gross litigation misconduct” by withholding tens of thousands of relevant documents from Broadcom during a patent infringement trial. That decision against Qualcomm was largely upheld by a federal appellate court last December.

Strategically, the benefits of reaching a comprehensive settlement with Broadcom would seem to far outweigh the financial impact on Qualcomm’s earnings—especially since Qualcomm said terms of the agreement “will not result in any change” to its licensing revenue model for its 3G and 4G wireless technologies. And Qualcomm’s licensing revenue is the central engine of its success.

After fighting for more than a decade to establish its CDMA (for Code Division Multiple Access) wireless digital standard, Qualcomm attained its first strategic breakthrough in 1999, when it settled a wide-ranging patent dispute with Sweden’s Ericsson. In that deal, Qualcomm agreed to sell its CDMA wireless infrastructure business to Ericsson and Ericsson agreed to support a single worldwide CDMA standard.

At that time, Qualcomm also settled on a corporate strategy that focused its business on wireless innovation, which enabled the company to generate enormous revenue through technology licensing deals.

In July, Qualcomm struck a surprise settlement agreement with Nokia, the world’s largest mobile phone maker, that ended a similar high-stakes licensing dispute. That deal enables Qualcomm and Nokia to share many more technology patents than they did before. Qualcomm also licensed its technology to Nokia and Nokia allowed Qualcomm to incorporate its technology within its mobile phone components; buyers of those components will pay Nokia’s royalty fees rather than Qualcomm’s.

Broadcom posed the last major challenge to Qualcomm’s licensing model.

“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.

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We saw the proxy battle for control of San Diego’s Amylin Pharmaceuticals heat up last week, amid signs that wireless technology giant Qualcomm is in peace talks to settle a wide-ranging patent dispute with Broadcom, its Southern California chip-making rival. We also got some new insights into venture capital activity in San Diego, and in the emerging cleantech sector. Let Xconomy be your guide.

—All three factions in the proxy battle at San Diego’s Amylin Pharmaceuticals are appealing for shareholder support in advance of the company’s annual shareholder meeting on May 27. Billionaire investor Carl Icahn and Eastbourne Capital Management are trying to oust Amylin’s governing board by persuading shareholders to vote for their slate of candidates. Amylin’s management contends the dissident shareholders just want to sell the biotech. Talks to reach some kind of accommodation ended with no progress—and no peace—in the continuing battle.

—Two San Diego biotechs disclosed layoffs last week. Arena Pharmaceuticals said the company is laying off 130 of its 400 employees, after investors were disappointed in results from Arena’s mid-stage clinical trial of a new drug for treating obesity. In a separate announcement, Sequenom said it eliminated 30 jobs as it reorganized its genetics analysis business.

—San Diego’s Qualcomm (NASDAQ: QCOM) postponed its Q2 financial results last Wednesday. Qualcomm explained it is in advanced IP settlement discussions with rival chipmaker Broadcom of Irvine, CA. Qualcomm rescheduled its earnings release for today and said its revenue and operating income exceeded the company’s prior guidance, although that could change if Qualcomm agrees to pay Broadcom to end the acrimonious patent dispute.

—With venture investments in San Diego in retreat, Hans Swildens of San Francisco-based Industry Ventures told Bruce that San Diego’s homegrown VCs are “in transition,” which seemed to be a diplomatic way of saying many local venture firms …Next Page »

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The Associated Press did some saber-rattling in San Diego yesterday at the annual convention of the Newspaper Association of America, and today Google CEO Eric Schmidt delivered his riposte.

In a keynote speech, AP chairman William Dean Singleton had vowed to more aggressively enforce the AP’s intellectual property rights. He said the wire service will “work with portals and other partners who legally license our content” but will take “legal and legislative remedies against those who don’t.” Singleton added, “We can no longer stand by and watch others walk off with our work under misguided legal theories.”

Schmidt, who has described journalism as a central tenet of democracy, suggested in a keynote address of his own today that the solution to the massive problems that news organizations now face lies in innovation, and in studying the way people are accessing and using information “in the cloud.”

While it’s difficult to plan for innovation, Schmidt says it’s possible to “architect a structure where innovation is welcome, and we’re starting to see that now with a new form of computing, called cloud computing.”

In cloud computing, Schmidt says, the computer servers in the network do most of the data storage and computer processing. “In this new model,” Schmidt says, “the network is always there, always reliable. All you have to do is pick up a phone, a netbook, a PC, what have you.”

The Internet has created a quandary for news organizations around the world. On the one hand, moving the news online has made it vastly more accessible. But in the process,  newspaper advertising and classified revenues have plunged, exposing …Next Page »

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It was a quiet week for deals in the Northwest, with a few partnerships formed in software, biotech, and intellectual property.

—Bothell, WA-based MDRNA (NASDAQ: MRNA), a developer of RNA interference technology for drug development, agreed to license its technology non-exclusively to Novartis in exchange for $7.25 million in upfront fees, as Luke reported. MDRNA also signed a separate deal that gives Novartis an exclusive period in which to form a larger R&D collaboration with MDRNA. Terms of that deal were not disclosed.

—Intellectual Ventures, the Bellevue, WA-based invention firm, inked an agreement with the Indian Institute of Technology-Bombay to license some of the university’s technologies, and to work with its researchers on commercialization strategies. Financial terms were not announced. Intellectual Ventures has similar deals in place with other institutes in Asia, but IIT-Bombay is a particularly prestigious university specializing in electronics, software, and materials, and the partnership epitomizes the firm’s broader strategy to support the invention process around the world—and profit from it.

—Seattle startup Ontela, a maker of photo-sending software for camera phones, has teamed up with T-Mobile to offer its service via the photo-sharing website Photobucket. T-Mobile subscribers can sign up to have their pictures sent automatically from their BlackBerry smartphone or other handheld device to the photo site. Ontela’s software is now available to about half of all U.S. mobile-phone subscribers, and comes pre-installed on four of the top five handset manufacturers.

—Seattle-based Evri, a startup that makes novel Web browsing software, formed a partnership with The Times of London to provide a widget that recommends related articles when a reader clicks on a story of interest. Financial terms were not given. This deal follows a similar one announced last month with the Washington Post, and is part of Evri’s effort to build an audience for its service, which tries to understand connections between people, products, and other entities on the Web and present the info in a useful way. (This news was dampened later in the week when it was reported Evri laid off one-fourth of its staff.)

—Luke reported that Geospiza, a Seattle developer of software that helps researchers sort through mounds of genomic data, received a two-year, $1.1 million grant from the National Institutes of Health, as part of a collaboration with The HDF Group. The effort will support biological software applications that use Hierarchical Data Format, an advanced data capability made to handle demanding and complex tasks like studying genomes and monitoring climate change.

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On Monday, Bellevue, WA-based Intellectual Ventures signed an agreement with the Indian Institute of Technology-Bombay to license some of the university’s inventions and to work on technology commercialization strategies with its researchers, as reported by CIOL, Express India, TechFlash, and other outlets. It’s not really big news by itself—Intellectual Ventures has formed similar partnerships with other institutes in India, as well as in China, Japan, Korea, and soon, Singapore—but it fits into the broader strategy the firm is pursuing around the world to foster invention.

Last fall, Intellectual Ventures opened offices in five Asian countries in an effort to gain access to a much wider pool of inventors and talent. Led by global head of technology Patrick Ennis, a physicist and former managing director at Arch Venture Partners—and other members of Intellectual Ventures’ senior leadership team, including co-founder and president Edward Jung—the company is building relationships with prominent academic scientists in Asia, and setting up partnerships whereby it can license certain inventions in exchange for helping with patents and commercialization. The strategy reminds me a lot of Microsoft Research, which has set up labs in China and India in the past 10 years and built partnerships with local university researchers and administrators. (This blueprint is not surprising, given that Intellectual Ventures’ co-founder and CEO Nathan Myhrvold was the founder of Microsoft Research.)

The reception Intellectual Ventures is getting also reminds me of Microsoft Research. While most university officials see the partnerships as benefiting their researchers and increasing the flow of innovation, critics have rolled out the standard “patent troll” fears that the company is coming in to buy up all the best intellectual property—which will only be assuaged by years of relationship building and repeatedly demonstrating that these sorts of deals can benefit both sides.

Nevertheless, Intellectual Ventures’ Indian operation seems to be off to a strong start. It is now staffed by about 15 people, led by Ashok Misra, the former head of IIT-Bombay and a highly respected polymer materials scientist.

I caught up with the staff of Intellectual Ventures to hear about the workings of the Indian university partnership. Nicholas Gibson, one of the firm’s directors of business development in Japan, said via e-mail, “The agreement with IIT-Bombay is important as it gives [us] more direct access to top flight university-based Indian inventors. The deal also gives IIT-B access to commercialization possibilities …Next Page »

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Discovery Communications (NASDAQ: DISCA), the owner of Discovery Channel and other TV networks and websites, has filed a lawsuit against Amazon (NASDAQ: AMZN), alleging that the Kindle and Kindle 2 infringe on a Discovery patent issued in 2007 for e-book security and copyright protection. Discovery is seeking an unspecified amount of compensation.

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It was a relatively busy week for deals in the Northwest, with plenty of action in software, biotech, and alternative energy.

—Seattle and San Francisco-based Twilio, a startup that provides cloud-based tools for building voice applications over the phone, raised its first institutional round of funding from Founders Fund and computing pioneer Mitchell Kapor. The amount was not disclosed. Twilio co-founder Jeff Lawson talked with me about the deal and how it will help the company expand its services.

—Seattle’s Principle Power, a wind energy startup, is in the process of raising $20 million to develop the world’s first floating wind farm in the deep waters off the coasts of Oregon and Portugal. Principle Power’s CEO, Alla Weinstein, wouldn’t say who the company’s strategic investors are, but she did say that no VC firms or Seattle investors are involved. The deal is expected to close in the second quarter of this year.

—Luke broke the exclusive story of Merck’s Stephen Friend raising $5 million in anonymous donations to pursue the vision of open-source drug development at a new Seattle nonprofit called Sage. The idea is to provide an open database of patients’ genomic profiles that researchers, doctors, and drug companies can access in order to make better drugs.

—Bellevue, WA-based Ignition Partners led a $10 million investment in Zenprise, a mobile-management software startup in Fremont, CA. Existing investors Bay Partners, Mayfield, and Shasta Ventures also participated in the round. Zenprise makes automated software to help businesses fix IT problems with smartphones.

—Seattle-based Arzeda, a University of Washington startup that designs custom-built enzymes, has secured commitments from OVP Venture Partners and WRF Capital to anchor its $12 million …Next Page »

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Bellevue, WA-based Intellectual Ventures said today it has formed an alliance with Telcordia Technologies, a networking and telecommunications firm in Piscataway, NJ. Intellectual Ventures has acquired the rights to license about 500 of Telcordia’s patents, and in return, has also agreed to fund inventions from Telcordia’s R&D lab. Financial terms of the deal were not given.

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It was a quiet week for deals in the Northwest, with just a trickle in the biotech, business software, and gaming arenas.

—Seattle-based Cell Therapeutics (NASDAQ: CTIC) sold its remaining 50 percent stake in its cancer drug Zevalin to its partner, Irvine, CA-based Spectrum Pharmaceuticals (NASDAQ: SPPI) for $18 million, Luke reported. The cash will buy some time for the struggling biotech to maximize the value of another of its drugs, pixantrone for non-Hodgkin’s lymphoma.

—Luke uncovered the fascinating story of a licensing deal with Merck that’s now providing a windfall for the University of Washington. Indeed, sales of Merck’s Gardasil, one of the world’s best-selling vaccines (for cervical cancer), have helped triple the UW’s licensing revenues from the Washington Research Foundation in the past three years to $38 million in 2008. It’s all thanks to some contentious patent litigation from the 1990s that strengthened and extended the lifespan of a piece of UW intellectual property.

—Seattle-based Visualant (OTCBB: VSUL) is in the process of acquiring TransTech Systems, a Wilsonville, OR-based maker of identification and security products. Financial terms were not disclosed. The deal is expected to close before the end of June. Visualant makes light-based authentication and security technologies.

—Digini, a video-game tool developer based in Issaquah, WA, merged with Shanghai, China-based Vyk Games to form a new company called Blade Games, which will make game development software. Financial terms of the deal were not disclosed. Blade Games will be based in Bellevue, WA, and headed by former Digini CEO Tony Garcia.

—Redmond, WA-based Concur led a $4.6 million Series B investment in RideCharge, a mobile taxi-booking service based in Alexandria, VA, that lets travelers arrange for ground transportation using their mobile device. Concur makes corporate expense management software.

—Seattle-based Madrona Venture Group led an $8.5 million Series B financing round for Yieldex, an inventory management startup based in New York. Amazon, Sequel Venture Partners, and First Round Capital also participated in the funding. Yieldex won the $100K Amazon Web Services startup challenge in November.

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Bellevue, WA-based Intellectual Ventures announced today it has acquired the patent portfolio of Santa Clara, CA-based semiconductor firm Transmeta. Financial terms of the deal were not disclosed, but Intellectual Ventures gains more than 140 U.S. patents and a “substantial number of pending patent applications,” according to a company statement. Transmeta was acquired by Novafora for $256 million in November.

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[Updated Jan. 28, with information on Intellectual Ventures' patents (see below)]
If its volume of new patents is any indication, Microsoft is going to be just fine. The Redmond, WA, software firm blew away the rest of Washington state in terms of the number of patents it was granted last year. That’s according to IFI Patent Intelligence, based in Wilmington, DE, which recently released a national survey of patent grants for 2008. Xconomy obtained the figures for Washington state, as well as Massachusetts and California. (See the list of Washington’s top 25 patent winners below.)

Patent awards are, of course, just one measure of an organization’s competitiveness and inventiveness. It’s hard to draw definitive conclusions about a company’s ability to innovate based on its number of patents, say—imagine trying to compare a biotech company with an electronics firm, or a young software startup with an established powerhouse. But it’s still a key measure of an organization’s investment in its intellectual property.

Microsoft’s tally (2,030) is greater than the rest of Washington’s top 25 combined. It was good enough for fourth place nationally, behind IBM (4,186), Samsung (3,515), and Canon (2,114), and ahead of Intel (1,776). In Washington state, Sharp Laboratories and the University of Washington were a distant second and third, respectively.

A few other notables. Boeing is fairly low on the list (16th), in part because the figures only count patents awarded to each organization’s operations in Washington; patents awarded to offices or operations outside the state are not included in this list. Amazon ranks pretty low as well (12th), and Bellevue-based Intellectual Ventures, the invention company, is in 8th place, listed as “Searete.” Lastly, there was a seemingly random tie for 5th place between forestry firm Weyerhaeuser (which just closed two of its Washington mills this week) and biotech company ZymoGenetics (which just bought back the rights to its lead cancer drug candidate today).

Without further ado, here’s Washington state’s top 25 patent winners in 2008:

1. Microsoft — 2,030
2. Sharp Laboratories of America — 144
3. University of Washington — 47
4. Battelle Memorial Institute — 33
5. (tie)
Weyerhaeuser — 28
ZymoGenetics — 28 …Next Page »

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Which San Diego firms are the most inventive? When the 2008 year-end patent figures recently became available, we decided to find out. Xconomy is listing the top 25 patent winners in the San Diego region below, based on data provided by IFI Patent Intelligence of Wilmington, DE. Our compilation includes a few surprises.

San Diego-based Qualcomm might reasonably be expected to lead the region in patents issued in 2008—and with its longtime leadership in wireless technology, indeed that was the case. Yet the company that garnered the second-highest number of patents last year is not a major engineering research and development conglomerate like SAIC, but Callaway Golf, the Carlsbad-based maker of high-end golf clubs.

Some also might find it surprising to see a startup company in the top 10, since prosecuting patents is neither cheap nor routine—and startups are typically founded on a sole technology. Yet San Diego’s Fallbrook Technologies ranks No. 8 on our list, with 21 patents issued in 2008, which was a decline from 31 patents awarded to Fallbrook in 2007. The venture-backed startup has more than 300 patents issued or pending for its revolutionary transmission design.

In preparing the data, IFI analyzed 2008 utility patents assigned to companies by the U.S. Patent and Trademark Office. IBM continued to top the national list in 2008, with 4,186 patents issued, and U.S. companies accounted for 49 percent of all …Next Page »

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Constrained by legal restrictions and zealously protected by their handlers, the CEOs of Fortune 500 companies are rarely enlightening when they make public appearances. But Qualcomm (NASDAQ: QCOM) CEO Paul Jacobs delivered a close approximation of candor this morning in what was billed as a keynote presentation at the Red Herring Global 100 summit, which is taking place this week in downtown San Diego. The presentation turned out to be a conversation with Red Herring publisher Alex Vieux, who began by saying he had different questions for Jacobs than the ones he had previously submitted to Qualcomm.

What I found insightful were Jacobs’ responses to questions about running a public company, which covered the gamut from the company’s evolving, less contentious intellectual property strategy to M&A plans to its R&D strategy and more (see below). In the end, Vieux observed that it’s “obviously a much bigger headache than it was five or 10 years ago.”

“I’ll tell my father that,” Jacobs responded wryly, referring to Qualcomm founder and chairman, Irwin Jacobs. Paul Jacobs started working at Qualcomm as employee No. 33 in 1988, after getting a doctorate in electrical engineering from UC Berkeley. The younger Jacobs’ work initially focused on writing software code to compress speech for digital communications systems, although he gained managerial experience overseeing new technology development. He was president of Qualcomm’s Wireless and Internet Group in 2005, when he was named to succeed his dad as CEO.

“When I got hired, the board said, ‘Oh, no one can replace Irwin,’ ” Paul Jacobs said. “We’re going to be a team. You go focus on the technology and these other guys are going to go off and focus on the licensing and IP [intellectual property]. And that just didn’t work out. You can’t do it that way.”

Vieux did not ask Jacobs how that situation had changed. But Qualcomm has engendered …Next Page »

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