UPDATE 2-Qualcomm barred from using Broadcom 3G patents

(Recasts; changes headline; adds details from ruling, byline)

By Gina Keating

LOS ANGELES, Dec 31 (Reuters) - A federal judge in California ruled on Monday that wireless chip maker Qualcomm Inc (QCOM.O) must immediately stop selling third-generation, or 3G, WCDMA cellular chips that infringe on the Broadcom Corp (BRCM.O) patents.

U.S. District Judge James Selna ruled, however, that Qualcomm can keep selling some chips whose designs infringe three patents held by rival Broadcom through January 2009.

Qualcomm also is restricted to selling only cellular chips it was offering as of May 29, 2007 -- when a Santa Ana, California jury found that it infringed on the Broadcom patents -- and only to customers it had as of that date.

A Qualcomm spokeswoman said the company's attorneys were reviewing the ruling and had no immediate comment.

In a statement, Broadcom General Counsel David Dull said the company was "pleased with today's ruling."

"Broadcom should not have to compete against companies that use Broadcom's own patented technology against us, and this injunction puts a stop to Qualcomm doing just that," Dull said.

WCDMA mobile wireless technology provides much higher data speeds to mobile and portable wireless devices than most North American networks.

Qualcomm also must pay mandatory royalties to Broadcom for the chips it sells during the "sunset period" ending Jan. 31, 2009.

The judge set royalties at 6 percent for a patent covering video compression for mobile phones and at 4.5 percent for another covering simultaneous communications between different types of networks.

He ordered Broadcom and Qualcomm to negotiate a royalty for a third patent covering walkie-talkie-style technology or be prepared to brief the court on an appropriate royalty at a Feb. 29, 2008 hearing.

Sprint Nextel Corp (S.N) plans to put that feature, which it called QChat, in phones in the first quarter of 2008 using Qualcomm chips.

Selna ruled that after the "sunset" date, Qualcomm is permanently barred from infringing the three Broadcom patents.

Broadcom had asked the judge to impose 18-month mandatory license fees for two of the infringed patents for a limited set of Qualcomm products and to bar Qualcomm from selling chips used for the QChat feature.

Qualcomm had offered to pay three times the amount of a "reasonable royalty" so that it could continue using Broadcom's patented technology with no injunction.

Selna also ordered the companies to file a joint report before the February hearing about how they plan to handle Qualcomm's attempts to "design around" the infringing chips. (Reporting by Gina Keating, editing by Richard Chang)