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Qualcomm Settles Legal Dispute With Broadcom

April 27, 2009

Qualcomm announced on Sunday it would pay $891 million over four years to rival Broadcom in order to settle their dispute over intellectual property rights and patents, the AFP reported.

Litigation over all patent infringement claims in the International Trade Commission, the European Commission and the Korea Fair Trade Commission will be dismissed as part of the agreement.

The statement said Qualcomm would pay Broadcom $891 million over four years, while other terms of the agreement will remain confidential under the deal.

Paul Jacobs, chairman and CEO of Qualcomm, and Scott McGregor, president and CEO of Broadcom, said in a joint statement: “We believe that this resolution is positive for both Qualcomm and Broadcom, our customers, our partners and the overall industry.”

“It made sense for Qualcomm to end the legal uncertainty even though this was a big payout for Qualcomm,” said Ed Snyder, Charter Equity Research analyst.

Analysts expect Qualcomm to report quarterly revenue of $2.35 billion on April 27.

Qualcomm general counsel Donald Rosenberg said the goal was to eliminate the need for litigation going forward.

He said lawyers had been working around the clock at Qualcomm and Broadcom for a couple of weeks in the hope of reaching an agreement.

Qualcomm is a major US producer of components for wireless telephones headquartered in San Diego, California.

Broadcom Corporation is a major producer of semiconductors for wired and wireless communications based in Irvine, California. The company’s revenue reached $4.66 billion in 2008.

“It is clearly costing Qualcomm a lot but it’s best for both companies to move on,” said Snyder. “It’s a win for Broadcom.”

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