Federal Circuit Dismisses Stay Petition for Qualcomm Chip Ban
The U.S. Appeals Court, Federal Circuit, dismissed a petition by Qualcomm and carriers and handset makers to stay an International Trade Commission ban on Qualcomm chips that infringe on Broadcom patents. The court lacks jurisdiction to review the June 21 ITC order until the presidential review period ends Aug. 6, it said.
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Qualcomm is undeterred. The court “denied the request for stay on a procedural basis,” it said. “It made no determination of the substantive merits of the stay request.” Qualcomm and other parties may refile stay requests if the President does not veto the ITC ban, it said.
The ruling does not mean the battle is lost for Qualcomm and other petitioners, Stifel Nicholaus analysts said. “We view this as more of a headline risk than providing any indication of how the court will ultimately rule.” Of more import was Thursday’s licensing agreement between Verizon and Broadcom (CD July 20 p11), which “substantially reduces the prospect for Qualcomm and its remaining carrier and handset allies to obtain a presidential veto,” they said. Chances of a veto will be “close to zero” if Broadcom comes to terms with Sprint Nextel or another major player before Aug. 6, they said.
A Sprint deal would be especially significant, given that company’s public safety ties, said Rebecca Arbogast, a Stifel Nicholaus analyst. Arbogast thinks many carriers are in talks with Broadcom, which said Thursday that it is prepared to cut deals with more carriers, she said. The key issue is if those agreements will be signed before the Aug. 6 deadline, she said. A Sprint spokesman declined comment on whether the company will seek a licensing agreement, but said the company will join Qualcomm in seeking presidential disapproval.
The Verizon/Broadcom licensing agreement is a “positive development,” Qualcomm said. The deal “removes uncertainty for Verizon Wireless and its customers,” and the economic terms are “far less drastic” than the ones Broadcom demanded of Qualcomm, Qualcomm said. But it’s not an ideal solution, since it does not solve problems for others affected by the ban, Qualcomm said.