Earlier this week, Qualcomm’s General Counsel Lou Lupin resigned in the face of mounting legal battles related to Intellectual Property in 3rd Generation Wireless systems. Rightfully so, because Qualcomm has had several setbacks in its patent disputes with Broadcom and Lou was responsible for directing these battles. Moreover, for a company like Qualcomm that has been so successful so far and collected so much royalty from patents, Broadcom has to be a big thorn on its ego (I contend that any company as successful as Qualcomm has sufficient corporate big-ego and arrogance)
First, Qualcomm lost its patent dispute to Broadcom (Qualcomm is appealing). On top of it, Broadcom had the nerve to ask for $6 for each handset sold with a Qualcomm chip (See Broadcom gives Qualcomm a taste of its own medicine for some background).
Second, the U.S. International Trade Commission on June 7th banned the import of future models of 3G handsets with Qualcomm chips that infringes a Broadcom patent. Qualcomm’s pursuit of a stay of the import ban hasn’t materialized so far.
Third, the Presidential veto that Qualcomm was seeking was rejected (see Sticking it to Qualcomm).
Fourth, Verizon Wireless, Qualcomm’s biggest partner in the U.S., does U-turn and pays Broadcom to import EV-DO mobile devices. As part of the deal, Verizon also will drop its part in the effort to overturn the ruling.
Fifth, a federal judge in San Diego last week excoriated Qualcomm for “gross litigation misconduct” in another dispute with Broadcom, saying Qualcomm waived rights to enforce two patents on compressing video signals because it deliberately concealed them from an industry standard-setting group.
Sixth, a judge last Friday tentatively doubled Broadcom’s $19.64 million damages awarded against Qualcomm in May for the patent infringement.
And now, seventh, the head-honcho of Qualcomm’s patent battles has resigned (No need to feel too bad, he made $2.5 million in stock options on Fed-20-20007 and another $1 million in march-06)
In addition, Qualcomm is also involved in another legal dispute with Nokia, the world’s biggest mobile phone maker.
All this bad news, and there’s probably more to come, makes it more likely that Qualcomm will come down from its high throne and settle with Broadcom. Of course, it’ll be billed as a mutual agreement in the best interest of society!