Qualcomm has lost out on its first of three chances to put a stay on the patent dispute it has with Broadcom, with the US International Trade Commission denying a request by Qualcomm to stay the order to ban the chips which Broadcom has demonstrated to the ITC’s satisfaction, infringe on its power conservation patents.
Next up will be a request by a US court to stay the order and finally, if that fails, the US president can squash the order under ITC’s rules, using a veto.
Qualcomm and its major US customers Verizon and Sprint have every right to expect the US courts to intervene, since recent filings over patent infringement on technology cases, have almost never ended in a ban on a device, which would alter the status quo, while an appeal is heard. But if it gets as far as presidential veto, it would likely cause uproar and we cannot see a positive outcome at that stage as likely.
Because Qualcomm has been so successful in turning the CDMA chip market into an unofficial monopoly, with harsh licensing terms and a difficult manufacturing process for CDMA chips, neither Verizon and Sprint can go anywhere else for chips for their next generation of handsets, particularly those from LG Electronics which were being lined up against Apple’s iPhone device, due for launch any day now. The ITC ban was a partial ban, allowing existing handsets to continue to be imported, but denying new products a chance to enter the market.
You can see this two ways. Verizon and Sprint should have thought more carefully about their partners in cellular telephony – the W-CDMA market has choice and open standards ‘ or you can take the view that they are being punished through no fault of their own.
If you see it the latter way, there would be virtually no way to bring to book any supplier to the major US cellular operators, which does not obey rules of intellectual property.
Although the ITC said that it went to great lengths to provide a remedy that limited Qualcomm’s on-going infringement without harming the public, a US court is likely to at least place a stay on the order, giving Qualcomm much of the 12 to 18 months it needs to put in place a workaround and do another chip run. Of course there is always the chance that Qualcomm will give up the appeal and cut a deal with Broadcom.