Broadcom sues Qualcomm for misuse of patents

NEW YORK Wed Oct 8, 2008 1:47pm EDT

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NEW YORK (Reuters) - Wireless chipmaker Broadcom Corp (BRCM.O) filed a complaint in federal court against rival Qualcomm Inc (QCOM.O), charging patent misuse, the latest round in their battle over cell phone technology licensing.

Broadcom said that Qualcomm's misuse of patents results in a "double recovery" of royalties, a windfall for Qualcomm at the expense of the wireless industry and consumers.

The complaint, filed Tuesday in the U.S. District Court for the Southern District of California in San Diego, said Qualcomm gained royalties on "exhausted" patents. The issue of patent exhaustion often arises in recycled or re-sold components.

Qualcomm was not available for comment.

The two companies are embroiled in a series of legal disputes in courts as well as the International Trade Commission. Many analysts see the actions as negotiating tactics by both sides seeking an advantage in seeking a licensing agreement.

In late September, a U.S. appeals court affirmed that Qualcomm infringed two patents and upheld an injunction in favor of Broadcom. But the appeals court ruled in Qualcomm's favor in one of the three patents at issue.

Broadcom shares rose 4 percent to $15.23, while Qualcomm rose 6 percent to $41.48, both on Nasdaq.

(Reporting by Ritsuko Ando; editing by Jeffrey Benkoe and Derek Caney)

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