Court ends phone import ban while Qualcomm appeals

IDG News Service - U.S. mobile users waiting for the next crop of phones could breathe a sigh of relief Wednesday when the U.S. Court of Appeals for the Federal Circuit granted a stay on an import ban against handsets that use some Qualcomm Inc. chips.

The International Trade Commission ordered the ban in June after the Qualcomm chips were found to infringe Broadcom Corp. patents. It affected only future models, not current imports. If imposed, it could affect handset makers including Motorola Inc., Samsung Electronics Co. and others, which filed motions seeking the stay. The latest move lets those manufacturers bring in the new phone models while Qualcomm appeals the ITC's order and seeks a reversal of the patent-infringement ruling.

The fight for the stay was considered an uphill battle. Smith Brittingham, a lawyer at Finnegan, Henderson, Farabow, Garrett & Dunner LLP, said in June he could remember only one time when such a ruling had been stayed pending an appeal. "It would be a significant victory for Qualcomm," he said at the time.

Last month, the Bush administration turned down a request by Qualcomm to stop the ban.

The stay affects the third-party companies that filed motions, which also include Kyocera Wireless Corp., Sanyo Fisher Co., T-Mobile USA Inc., LG Electronics MobileComm USA Inc. and AT&T Mobility LLC. The circuit court didn't grant a stay for Qualcomm's own imports, but Qualcomm does not itself import the chips found to infringe Broadcom's patents, according to a Qualcomm press release Wednesday.

Broadcom went to the ITC seeking an import ban only against Qualcomm. The third parties and Qualcomm argued in the appeals court that the ITC didn't have the authority to exclude products imported by other companies. The court said the third parties had a substantial case and the harm they might suffer weighed in their favor, according to Qualcomm. Broadcom could not immediately be reached for comment.

In July, Broadcom said it reached a deal with Verizon Wireless Inc. that would let Verizon continue to import phones using the disputed technology. Under that deal, Verizon will pay Broadcom $6 U.S. for every handset, PDA or data card that uses EV-DO (Evolution-Data Optimized) mobile broadband technology. The payments have a ceiling of $40 million per calendar quarter and a lifetime maximum of $200 million. As part of the deal, Verizon also will drop its effort to overturn the ruling.

The patent fight is one of a series of intellectual-property disputes between mobile pioneer Qualcomm and Broadcom, a communications chip maker that has moved aggressively into the mobile arena.