Broadcom fails to block Qualcomm chip imports

Broadcom has failed in its efforts to block US imports of millions of mobile phones containing chips made by its rival Qualcomm.

The two chipmakers are engaged in a long-running legal battle over patents and access to the lucrative mobile phone market, but the latest decision, by the International Trade Commission, has favoured San Diego-based Qualcomm.

Judge Charles Bullock said Qualcomm’s chips and the phones that contain them did infringe a Broadcom patent. But he said he did not recommend that an order banning Qualcomm chips in the US should also cover mobile phones made by other companies.

Qualcomm shares were 2.8 per cent higher on the news at $37.27 in midday trading in New York, while Broadcom shares fell 2.8 per cent to $28.76.

The judge ruled that Qualcomm had not infringed two other Broadcom patents. His decision is subject to review by the full commission and can then be challenged in the federal appeals court.

Last week, a judge in San Diego tried unsuccessfully to reach agreement with the the chairmen of the two companies. Irwin Jacobs of Qualcomm met Broadcom’s Henry Samueli for more than five hours but they failed to reach a deal on extensive patent disputes that include allegations of theft of company secrets and anti-competitive actions.

Court cases and complaints to regulators are also taking place in New Jersey, Europe and South Korea.

Broadcom is appealing a New Jersey antitrust case that was thrown out in August due to insufficient evidence. It is also one of six chip and cellphone makers that complained to the European Commission last year, alleging anti-competitive practices by Qualcomm in charging royalties that were too high for its patents.

Qualcomm is the number two maker of chips for cellphones behind Texas Instruments.