Press Release

Qualcomm Charges Motorola With Trade Secret Theft, Motorola Adds Non-CDMA Pager Patents To Dispute

Aug 18, 1997SAN DIEGO

Qualcomm products mentioned within this press release are offered by Qualcomm Technologies, Inc. and/or its subsidiaries.

Qualcomm Incorporated (NASDAQ: QCOM) today announced that Motorola has added seven additional patents to the ongoing dispute between the two companies. Motorola's new complaint comes two weeks after Qualcomm filed to add claims of trade secret misappropriation and conversion (i.e., theft) to its complaint against Motorola based on information uncovered during the litigation. The additional patents, which are related to Motorola's paging technology and pager products, do not claim coverage of any CDMA technology.

Qualcomm's proposed new claims filed on August 1, 1997 allege that in February of 1997, a senior Motorola engineer stole the upper half of the housing for Qualcomm's new Q™ phone from a Qualcomm supplier, Shieldmate Robotics, before the Q phone was publicly announced.

Qualcomm's filing states that the Motorola engineer took the confidential phone housing to Motorola where it was analyzed by other Motorola engineers and managers, and based on this analysis, Motorola learned valuable proprietary information about the Q phone before it was introduced to the public. Thereafter, Motorola sued Qualcomm and Shieldmate Robotics and sought a preliminary injunction to stop production and sale of the Q phone. The Court, in an April 24, 1997 decision, denied an injunction because Motorola had not shown a likelihood of success on the merits of the case, and further noted that Motorola's actions with respect to the Q phone housing taken from Shieldmate Robotics might well constitute "unclean hands" and an independent basis for denying Motorola's request.

Qualcomm's latest filing further alleges that only in April, when it appeared that Motorola's unlawful possession of the Q phone housing might be revealed through the litigation process, did Motorola return the housing to the supplier. Yet Motorola never notified Qualcomm about the theft despite awareness within Motorola at upper levels of management and by its outside lawyers in the Qualcomm lawsuit. According to Qualcomm's filing, Motorola's management condoned the theft and took no meaningful disciplinary action against any employee involved.

In a new complaint filed today in the same federal court in San Diego where the parties' earlier disputes are pending, Motorola alleges that Qualcomm's phone products infringe seven patents relating to Motorola's paging technology and pager products.

After its lawyers initially told an Illinois federal court that Motorola had no basis for asserting utility patents against Qualcomm, Motorola added three utility patents to the San Diego lawsuit in April and, shortly thereafter, a fourth utility patent. The new filing brings the total number of utility patents to eleven.

"It appears that Motorola has reached into its pager patent portfolio in an attempt to shore up its claims against Qualcomm," said Qualcomm President Harvey P. White. "We regret that Motorola has decided to take a piecemeal approach to the litigation in an apparent attempt to prolong whatever negative perception may be created by filing serial lawsuits. We do not believe that Qualcomm's phone products infringe any of the newly asserted pager patents. We believe these new allegations are as meritless as Motorola's original request for a preliminary injunction against the Q phone, which was denied in April. It seems that Motorola is making the new allegations to bring additional pressure on Qualcomm to change our license agreements with them."

Qualcomm and Motorola entered into an extensive cross-license agreement in 1990. Motorola has sued Qualcomm for patent infringement notwithstanding that agreement.

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, in conjunction 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

Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including timely product development, change in economic conditions of the various markets the Company serves, 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 24, 1996 and most recent Form 10-Qs.

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Qualcomm, OmniTRACS and Eudora are registered trademarks and Q phone and Eudora Pro are trademarks of Qualcomm Incorporated. Globalstar is a trademark of Loral Qualcomm Satellite Services, Incorporated.