Qualcomm Seeks To Mitigate Patents Losses To BroadcomQualcomm Seeks To Mitigate Patents Losses To Broadcom

The aftershocks of Qualcomm's losing patent infringements battles with Broadcom continued Wednesday as Qualcomm announced quicker-than-expected availability of W-CDMA (UMTS) chips that the company said comply with the latest court rulings.

The pin- and software-compatible chipsets will seamlessly replace existing products, Qualcomm said, noting that it anticipates the chipsets will appear in commercial handsets before the end of the current quarter.

While Qualcomm indicated it will appeal and/or seek stays for various pieces of the complex patents litigation, Broadcom indicated it will continue to hold Qualcomm's feet to the fire in the additional intellectual property litigation it is pursuing.

At an analysts meeting Wednesday morning, Qualcomm CEO Paul Jacobs conceded that the litigation and its aftermath may cause some "near-term impact," but he expressed confidence that Qualcomm will "remain the leader in the industry."

Immediately following the analysts meeting, Cowan and Company took note of the negative hits to Qualcomm, but said it still believed shares of the mobile phone supplier will appreciate 20% over the next year. Cowan noted that Qualcomm said it is quickly bringing to market workaround chips that presumably won't infringe on Broadcom's patents.

"We believe the introduction of new chips completely mitigates the immediate fallout from the injunction," Cowan said, although it noted that Qualcomm is still responsible for royalty and other payments to Broadcom.

On Monday, U.S. Federal Court James Selna approved Broadcom's request for a permanent injunction against certain Qualcomm products, which cover push-to-talk technology and wireless video technology. The W-CDMA chips at issue in the injunctive litigation are likely to be used in handsets for AT&T and T-Mobile USA cell phone service providers.

In patents for 1x/EV-DO and QChat products -- more likely aimed for use in Verizon Wireless and Sprint handsets -- Judge Selna issued a "sunset" provision that stays the order until Jan. 31, 2009; Qualcomm will likely be required to make royalty payments for those products.

Broadcom observed that Qualcomm "has either lost or withdrawn all of the patent infringement cases it brought against Broadcom." In addition to its litigation with Broadcom, Qualcomm is involved in extensive and complex litigation with Nokia.