Bush Lets Qualcomm Ban Stand

Qualcomm Inc. will appeal a ban on imports of mobile devices that use some of its chips, the company said Monday after the George Bush administration declined to reverse the ban.

The U.S. International Trade Commission imposed the ban in response to patent-infringement claims by Broadcom Corp., a rival communications chipmaker. The action keeps new models of phones using some Qualcomm chips from being imported and sold in the U.S.

Qualcomm had asked the Bush administration, through U.S. Trade Representative Susan Schwab, to reverse the ban. On Monday, the last day for a presidential veto, Schwab said the administration wouldn't act on Qualcomm's request.

Qualcomm said it will now appeal the ban at the Court of Appeals for the Federal Circuit. Last month, that court pushed back Qualcomm's appeal on a technicality, saying it couldn't rule on it until after the presidential review period.

Meanwhile, the company is working with handset makers and carriers to implement new software intended to minimize the impact of the ban, according to a Qualcomm statement.

In addition, Verizon Wireless Inc. agreed to pay Broadcom US$6 for every device it sells that use the offending chips. Schwab's statement mentions that Broadcom has also made an agreement with a second, unnamed mobile operator.

Now that two operators have made agreements with Broadcom, others might follow, said Smith Brittingham, a lawyer with Finnegan, Henderson, Farabow, Garrett & Dunner LLP. and a former investigative attorney with the ITC. If they all pay for the technology, they each don't feel like they're paying for something that their competitors aren't, he said.

Broadcom welcomed Schwab's letting the ban stand.

"This decision strengthens the intellectual property rights of all U.S. companies, not just Broadcom, and sends a clear message to all those who would seek to escape the consequences of their patent infringement," Broadcom said in a statement.