The ban - my take!

Tuesday, June 12, 2007

THe ITC ban that has left QualComm high-and-dry and BroadCom basking in its moments of glory is definitely not an aberration. It has been viewed by some as trouble that QualComm invited for itself.

Here is my take on it. BroadCom went into IP cross-licensing discussions with QualComm. The IP aggressive QualComm would have thrown out some of these patents from the discussion tables citing limited value while still being its own pricey self. A miffed BroadCom obviously felt that its portfolio had a greater value than suggested and decided to take the matter to the courts. While BroadCom would have had its novelty claims, QualComm would have argued on obviousness and prior-art. I had a look at the patent and the invention and the primary claim are fairly simple. But clearly, QualComm's arguments did not hold water. The claim was clear enough for the jury to come to a straight-forward conclusion despite QualComm's best efforts. Now that the ruling is out, QualComm is obligated to respect it, give credit to the inventors for thinking about it first no matter how simple or basic the invention is and find a solution. And this is something I would have expected QualComm to anticipate considering ts own aggressive stance. So, it is almost child-like to cry wolf and seek helping hands.

BroadCom, on its part, is expected to be reasonable in the price it quotes for QualComm. Obviously, it cannot be discriminatory in its pricing meaning that QualComm should have a fair shot at being able to pay the royalties and shut this matter there. My suspicion thus is that QualComm's hesitation does not come from the price that BroadCom may have asked ('steep' as used by QualComm may be an overkill), but more from the loss of pride, position and power. This is likely to embolden the others and more bitter battles can be expected. We are seeing that Nokia is already filing more lawsuits for 6 other patents. So QualComm wants to be able to control its own destiny and not compromise on the value of its own portfolio in an attempt to license patents from others at a much higher price than before. But hey, something has got to give!

Also, contrary to QualComm's explosive press-release, BroadComm has taken a rather dignified stance choosing not to get into an ugly war of words. The release that you can find in the link below clearly hints at the genesis of the law-suit-

http://www.broadcom.com/press/release.php?id=1013134

The coming few days will be very interesting for the U.S wireless industry and we will get to see more of where everyone's loyalties lie. For the moment, it appears that the long-time defending champion is caught on the back-foot.

Posted by Vijay Nagarajan at 3:31 PM  

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