Broadcom Cuts Losses, Spurns Santa Ana Retrial
Broadcom will not seek a new trial with Qualcomm after a Santa Ana court killed an order that Qualcomm pay double damages and attorney fees to the semiconductor rival, Broadcom said Friday. It “instead will accept the $19.6 million in compensatory damages as originally awarded by the jury and will immediately pursue an injunction against Qualcomm’s infringing products.”
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A Federal Circuit U.S. Appeals Court order in September threw a wrench into the Santa Ana U.S. District Court’s August order. Santa Ana’s award was based on a jury verdict saying Qualcomm’s patent infringement was “willful,” an assessment invalidated when the Federal Circuit tightened the willfulness standard in In Re Seagate, District Judges James Selna said in last week’s order. So willfulness and all infringement issues would need to be retried if Broadcom wanted to affirm the previous willfulness finding, Selna said. The parties could avoid another trial if Broadcom accepted the original jury awards and effectively cut its losses, he added. Qualcomm is pleased with the ruling, company legal counsel Alex Rogers said.
The news is good for Qualcomm’s wallet, but an injunction still looms: “The real risk to Qualcomm… is not the damages award, but rather, the risk of an injunction,” Stifel Nicolaus said. The Supreme Court’s eBay decision, not Seagate, governs the District Court injunction ruling, the firm said. “One of the factors emerging as important in post-eBay patent injunction decisions is whether the two companies compete,” it said. “Broadcom does not compete with Qualcomm in the areas covered by the patents,” but “sought to provide evidence at trial that they have ‘practiced’ each patent. We expect this issue to weigh heavily in the judge’s analysis, but the lack of a record may make that difficult.”
Qualcomm is expected to argue that a Broadcom settlement with Verizon Wireless related to Qualcomm chips banned by the International Trade Commission shows “monetary payment is sufficient” and an injunction “inappropriate,” Stifel Nicolaus said. However, “Broadcom would have a potent response that it only decided to license its technology to Verizon because it had certain larger business objectives, which it does not have with its opponent Qualcomm.” Qualcomm didn’t respond to requests for comment.