UPDATE 2-Appeals court vacates ITC ban against Qualcomm

(Adds company comments, analyst comment, background detail)

NEW YORK, Oct 14 (Reuters) - An appeals court has thrown out a U.S. import ban against Qualcomm Inc (QCOM.O) and asked a government agency to revisit its decision on Qualcomm's patent infringement legal battle with Broadcom Corp(BRCM.O).

The ruling follows a ban issued last year by the International Trade Commission on U.S. sales of some cell phones using Qualcomm chips that it found to infringe on a Broadcom patent related to phone battery saving technology.

But the U.S. Court of Appeals for the Federal Circuit on Tuesday vacated the ban, saying that the ITC did not have authority to issue a ban that affected cell phone makers and service providers that were not part of the original case between Qualcomm and Broadcom.

It asked the ITC to revisit the case.

Along with Qualcomm, its cell phone customers including Motorola Inc (MOT.N), Samsung Electronics Co (005930.KS) and LG Electronics Inc (066570.KS) had appealed the ITC ruling.

Qualcomm's legal counsel Alex Rogers said the company was pleased with the decision but noted that its current chips on the market already came with a software workaround that did not infringe Broadcom's patent.

Broadcom said it was pleased that the Appeals Court had confirmed that its patent was valid and that it would address the issue again with the ITC.

But Rogers said a challenge of Qualcomm's software workaround brought by Broadcom earlier this year may now be moot since the ITC was told to revisit the original case.

Analysts expect the two companies to eventually settle their legal differences and sign a technology licensing agreement.

Qualcomm did not say whether the companies were anywhere closer to coming to an agreement.

"We've always been open to resolving these issues with Broadcom," Rogers said.

Charter Equity Research analyst John Dryden said the ruling was a boost for Qualcomm, which has come up against many setbacks in the case against Broadcom, but added that did not represent any material changes for either side.

"It's a positive for Qualcomm in this legal battle where they've been losing many rulings," he said.

Broadcom shares were down $1.18 or 7 percent at $15.19 on Nasdaq, while Qualcomm shares were off 4.5 percent at $40.41. (Reporting by Sinead Carew; Editing by Bernard Orr)