QCHAT Hits a $ 2 Billion Dollar Snag all of a sudden
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There are some interesting posts in that thread.
Reuters
By Gina Keating
SANTA ANA, Calif., Aug. 16 (Reuters) - Sprint Nextel Corp (S.N: Quote, Profile, Research) stands to lose a $2 billion investment in a new phone feature if a court bars Qualcomm Inc (QCOM.O: Quote, Profile, Research) from making the necessary chips, Qualcomm executives testified on Thursday.
Broadcom Corp (BRCM.O: Quote, Profile, Research) has asked U.S. District Judge James Selna to permanently bar its rival from making chips covered by three Broadcom patents after an 18-month phase-out period.
A California jury found in May that Qualcomm infringed the patents, including one related to walkie-talkie technology Sprint plans to put in phones in the first quarter of 2008.
Sprint says that QChat feature is key to a plan for moving customers off a service acquired in its 2005 Nextel takeover. The No. 3 U.S. wireless service has lost customers in recent quarters, citing issues including Nextel network problems.
Qualcomm executives said at the penalty phase hearing in Santa Ana, California, that an injunction would "significantly" harm the company and customers including Sprint. Qualcomm asked the judge to force Broadcom to offer it a license for the disputed technology patents while it appeals.
In a separate interview with Reuters, Sprint's CEO did not rule out the possibility of an agreement with Broadcom.
Eric Rosen, Qualcomm's senior director of engineering, testified that Qualcomm and Sprint had worked on QChat for years, but they had not tried to design around the disputed patent after Broadcom filed its suit in May 2005 or a complaint with the U.S. International Trade Commission in 2006.
"I did not believe we were infringing," Rosen said, adding that Sprint does not have a "fallback" if an injunction is granted, and that the two companies would "have to go back to the drawing board."
Rosen said an injunction could affect 20 million Sprint customers who have signed up for push-to-talk service.
Sprint spokesman James Fischer declined to comment on the $2 billion figure cited by Qualcomm, while analyst Todd Rethemeier of Surterre Research said he would be surprised if the investment was that large.
At a Sprint technology conference that featured QChat, Chief Executive Gary Forsee would not say if Sprint was working with Qualcomm on a technology to avoid a ban on QChat.
"We have lots of options to work with both companies on the Santa Ana litigation. We'll use all the options we need to use," he said in an interview at the conference in Virginia.
Verizon Wireless, a venture of Verizon Communications Inc (VZ.N: Quote, Profile, Research) and Vodafone Group Plc (VOD.L: Quote, Profile, Research), agreed to pay Broadcom up to $200 million to license its technology to avoid a U.S. government ban related to another patent infringement case between the two California chipmakers.
Since May, San Diego-based Qualcomm has found a "technical solution" to one disputed patent and is working on "two or three paths" on the other two, but cannot say when the chips will be commercially available, Chief Technology Officer Roberto Padovani testified on Thursday.
Lawyers on both sides expect Selna to issue a ruling next month.
Bill Lee, attorney for Irvine-based Broadcom, described the compulsory license sought by Qualcomm as "quite controversial" and "grossly unfair," in part because it would extend to Qualcomm customers, who would not pay Broadcom separately.
It would leave Broadcom exposed to patent claims whenever it launches a product and competing against its own technology if and when it enters the U.S. cell phone market, Lee said.
Qualcomm attorney Evan Chesler argued Broadcom had weakened its position in the case by licensing the disputed patents to Verizon shortly before the penalty phase began on Tuesday.
In questions posed during summations, Judge Selna appeared concerned about the competitive effect of forced licensing.
"The remedy at law ought to compensate them for use of the patent but also ought to compensate them for a situation where they compete at a disability because their competitor is using their technology against them," Selna said. "They could make a lot more profit selling products than under the license." (Additional reporting by Sinead Carew in Tysons Corner, Va. )
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