Broadcom to U.S.: Ban Phones With Qualcomm Chips

Broadcom Corp. officials called on the U.S. International Trade Commission (ITC) to ban the import of mobile phones containing high-speed Qualcomm Inc. processors because of patent infringement.

Any patent remedy that does not ban imports of mobile handsets with Qualcomm multimode chips using two 3G (third-generation) wireless data standards would reward the company for patent infringement, Broadcom argued Wednesday during a rare patent-infringement hearing before the ITC. Broadcom "should not have to compete against companies that use our own patented technologies against us," said Scott McGregor, Broadcom's president and CEO.

The Broadcom proposal, supported by the ITC's Office of Unfair Import Investigations, would ban the import of mobile handsets containing Qualcomm chips using the WCDMA (Wideband Code Division Multiple Access) and EV-DO (Evolution-Data Optimized) broadband standards. Broadcom is not asking the ITC to ban smartphones, PDAs (personal digital assistants) or laptop cards using the WCDMA or EV-DO standards.

As the hearing continues Wednesday and Thursday, mobile handset makers and mobile carriers, including Verizon Wireless Inc. and Sprint Nextel Corp., are expected to ask the ITC to reject Broadcom's proposed penalty, arguing the impact on the mobile-phone business would be huge.

Qualcomm Responds

Cecilia Gonzalez, a lawyer for Qualcomm, asked the ITC to balance Broadcom's request with the needs of consumers and public emergency response agencies that use mobile phones to communicate. "What we are looking at is products that will carry us into the next generation of communications," she said late Wednesday. "To shut that down ... is totally contrary to the public interest."

Broadcom chips, while available in other countries, are largely absent from mobile phones in the U.S., Gonzalez added. The company only recently began marketing mobile phone chips, and the proposed remedy would do little to help it, she said.

"They don't compete in this," she said. "They're not there yet."

U.S. Representative Adam Schiff (D-California), also questioned the proposed penalty, saying it could hurt mobile customers. "I am concerned that the proposed exclusion of mobile handsets with EV-DO technology would cause significant harm to U.S. consumers by limiting competition in the mobile broadband services market and threatening the widespread adoption of mobile broadband services," he said.

The argument that the ITC shouldn't approve the remedy because of the impact on the mobile-phone industry doesn't make sense, McGregor said. "An effective remedy is not one that allows all, or nearly all, of the ongoing infringement to continue unabated," he said. "The fact that infringement is widespread should not preclude Broadcom from obtaining an effective remedy."

Background

At issue is Broadcom's patent on a mobile-chip feature that saves battery life when a mobile device cannot find a wireless signal. Virtually all mobile phones with EV-DO or WCDMA capabilities include the patented technology, Broadcom officials said. In October, an ITC administrative law judge entered an initial judgement that Qualcomm had violated parts of the Broadcom patent.

The two companies have been wrangling over patents since May 2005, when Broadcom filed two lawsuits in a California court alleging that Qualcomm had infringed 10 of its patents. Earlier this month, the companies settled two of Broadcom's patent claims, and in February, they each agreed to drop two patent claims against each other.

Broadcom officials told the ITC that they asked that only Qualcomm handsets be banned so that the effect on wireless customers would be minimal. Customers use basic handsets for voice and text messaging, and those functions normally don't use EV-DO, Broadcom said. Other devices such as PDAs that use EV-DO to access the Internet would operate normally, and companies could import those devices, Broadcom said.

"No EV-DO cellular network would be turned off," McGregor said. "No customers would be turned off."

ITC Chairman Daniel Pearson questioned why Broadcom didn't ask for all devices using the patented technology to be banned. The proposed remedy is a compromise, McGregor answered.

"We would like to exclude all of those things," McGregor said. "We also want to find a balance that'd meet the public good."

In addition to other objections, some public emergency-response agencies are scheduled to testify before the ITC Thursday, with many arguing a ban on EV-DO chips would hurt police officers' and firefighters' ability to communicate with each other. But Frances Edwards, a political-science professor at San Jose State University and former director of emergency preparedness for the city of San Jose, said police and fire departments don't rely on cell phones for critical communications.

Cell-phone networks often get overloaded during emergencies, she said. In addition, laptops and PDAs with EV-DO would continue to be available, she noted.

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