Qualcomm & Broadcom patent ruling is first inside-OHA dispute
2 January 2008 - 17:14
While the cosy group press releases might indicate otherwise, and Google’s assertions of a verbal compatibility contract attempt to sooth the troubled brows of interoperability advocates, don’t doubt that each member of the Open Handset Alliance is in the Android game for their own progression. Latest cellular casualty is Qualcomm, who have this week suffered in a business-damaging patent dispute with fellow OHA member Broadcom. The California ruling - that until January 2009 Qualcomm can continue to sell certain wireless chips that infringe three of its semiconductor rival’s patents, together with an immediate injunction on some WCDMA chips in its range - will see the company pay royalties while similarly hurrying to develop non-contentious products for existing clients.
“While Qualcomm will attempt to obtain further relief and clarity from the court on certain aspects of its order, the inability to obtain such relief will have an immediate short-term impact as handset customers transition to new designs for WCDMA products” Paul Jacobs, Chief Executive, Qualcomm
The next-gen WCDMA chips in question, which infringe a video-encoding patent held by Broadcom, will take until March to replace, according to Qualcomm, while they were keen to point out to manufacturing partners that alternative products were immediately available as an alternative to the royalty-bound versions. In fact, the Qualcomm-designed alternatives are newer technology, which would indicate that the company were likely to be phasing out the patent-infringing chips prior to 2009 anyway.
“We are working to comply fully with the court ruling while minimising the impact on our partners” Alex Katouzian, Vice President, Qualcomm CDMA Technologies
Nonetheless, it’s a legal decision that could have far-reaching implications on network line-ups in the US, and the hard-line Broadcom have taken is unlikely to win them support from carriers and manufacturers who hoped for a more amicable solution:
“It’s a bad order for the industry and for the millions and millions of wireless consumers who depend on wireless communications It’s really going to freeze innovation, or it could” Nancy Stark, Verizon Wireless Spokesperson
Overall, then, the message is simple: membership of the OHA and an investment in Google’s Android project (and its open-source, inter-compatibility bywords) is one thing, but share price and return still rule the day. In this round, with their shares up 4.6-percent (versus Qualcomm’s drop of 2.16-percent), Broadcom are the winners, but the whole affair lends a ruthlessly commercial air that Google may find less than to its taste.
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