Broadcom Says Qualcomm's Licensing Breaks the Law

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Bolstered by a couple of recent legal wins, Broadcom continues to attack Qualcomm, this time with a lawsuit charging Qualcomm with patent misuse.

In a lawsuit filed with the U.S. District Court for the Southern District of California in San Diego Tuesday, Broadcom alleges that the way Qualcomm charges for the use of its patents amounts to patent misuse. Broadcom says that Qualcomm is double-charging for its patents in a way that has brought Qualcomm a financial windfall and brought harm to the industry and consumers.

The idea of double-charging for patents falls under the legal concept of patent exhaustion. Nokia had also charged Qualcomm with double-charging for patents but failed in its lawsuit.

In Nokia's case, the handset maker argued that when Qualcomm licenses its patents to a chip maker, it shouldn't be able to collect royalties on the same patents when the phone maker buys the chips for use in phones. At the time Qualcomm said that its contracts with chip suppliers specifically reserve the right for Qualcomm to seek royalties from handset manufacturers. The case, which Nokia had filed in the Netherlands, was dismissed.

Broadcom, however, may be hoping that a recent ruling sets a precedent that could work in its favor. In a statement Wednesday, Broadcom refers to a U.S. Supreme Court ruling on the scope of the patent-exhaustion doctrine in a case between Quanta Computer, the Taiwanese computer manufacturer that makes laptops for most of the largest computer companies, and LG Electronics. In that decision, handed down in June, the Supreme Court bolstered the concept of patent exhaustion by ruling against LG, which had argued that Quanta should pay for the LG patents used in Intel chips incorporated in its computers.

This most recent Broadcom suit is the latest in a long string of legal battles with Qualcomm. Qualcomm recently lost several cases involving Broadcom and has twice been accused of trying to skirt the law. It was recently found in contempt for failing to follow an injunction to stop selling products using certain Broadcom patents. In addition, a judge has asked the State Bar of California to investigate Qualcomm lawyers for a possible ethics violation after the judge found that Qualcomm had intentionally withheld tens of thousands of important documents in a separate case involving Broadcom.

Qualcomm has not yet offered comment on the suit.

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