Qualcomm Incorporated (NASDAQ: QCOM) disclosed in its 10K filed with the Securities and Exchange Commission (SEC) yesterday that Ericsson, Inc. and Telefonaktiebolaget LM Ericsson ("Ericsson") filed a lawsuit against the Company in the U.S. District Court for the Eastern District of Texas, Civil Action No. 2-96CV183. The complaint alleges that various elements of the Company's Code Division Multiple Access (CDMA) equipment and components infringe one or more patents owned by Ericsson. Qualcomm believes the complaint is without merit and will vigorously defend the action.
Immediately following service of the complaint, Ericsson informed Qualcomm that the complaint had been filed for tactical reasons and that Ericsson's outside counsel had served the complaint in error and by mistake. Promptly after being served, Ericsson and Qualcomm entered into a stand-still agreement under which each party agreed, among other things, not to pursue any litigation pending resolution of negotiations over a possible CDMA cross-license, as long as neither party publicized potential claims it might have against the other. Since Qualcomm was notified of the filing of the complaint approximately eight weeks ago, the Company and Ericsson have been conducting extensive negotiations regarding terms of a proposed IS-95 CDMA cross-license. Although discussions are ongoing, the Company has disclosed the lawsuit in light of the failure to successfully conclude the negotiations within the time frame contemplated by the parties.
Headquartered in San Diego, Qualcomm develops, manufactures, markets, licenses and operates advanced communications systems and products based on its proprietary digital wireless technologies. The Company's primary product areas are the OmniTRACS® system (a geostationary satellite-based, mobile communications system providing two-way data and position reporting services), CDMA wireless communications systems and products and, inconjunction with others, the development of the Globalstar? low-earth-orbit(LEO) satellite communications system. Other Company products include the Eudora Pro? electronic mail software, ASIC products, and communications equipment and systems for government and commercial customers worldwide. For more information on Qualcomm products and technologies, please visit the Company's web site at http://www.qualcomm.com.
Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including the risk that the Company may be forced to engage in costly litigation to protect patents and rights and the material adverse consequences to the Company if there were an unfavorable outcome of any such litigation, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 28, 1996 and most recent Form 10-Qs.
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