SAN DIEGO -- March 28, 2000 -- Qualcomm Incorporated (Nasdaq: QCOM) and Motorola, Inc. (NYSE: MOT) today announced an agreement to extend their Code Division Multiple Access (CDMA) cross-licenses and to dismiss all claims and counterclaims in the series of patent infringement lawsuits between the companies that began in March 1997.
Under the new settlement, Qualcomm and Motorola have agreed to leave unmodified the financial terms of their original 1990 royalty-bearing license agreement for CDMA applications that encompassed certain patents filed before July 3, 1995. The licenses granted by Motorola to Qualcomm under the 1990 agreements for subscriber and infrastructure products have been terminated since Qualcomm has since sold its subscriber and infrastructure businesses.
The new accord encompasses certain patents filed after July 3, 1995 and licenses patents for CDMA standards including IS-95 A and B, RTT MC 1X, 1X Plus and 1Xtreme. As part of the agreement, Motorola will pay royalties to Qualcomm at rates consistent with those generally paid by the industry for using newly licensed patents. These include Qualcomm patents, which had been at issue in the litigation, for CDMA subscriber products across all licensed CDMA standards. The settlement, consistent with their 1990 agreement, also confirms that both Motorola and Qualcomm have the right to market CDMA chipsets without paying a royalty to the other company based on chipset sales.
The agreement ends three years of complex litigation comprising seven separate federal court cases alleging claims and counterclaims for patent infringement, trade dress infringement, breach of the parties' license agreements, misappropriation of trade secrets and unfair competition. Each company is dismissing its claims and counterclaims against the other. No payments are being made in consideration for the dismissals. In addition, the parties have agreed to a three-year moratorium on patent infringement lawsuits with respect to CDMA subscriber products, network equipment, chipsets and test equipment.
Additional details of the settlement were not announced by either company.
"Qualcomm is pleased to put this lengthy and divisive dispute with Motorola behind us," said Dr. Irwin Mark Jacobs, chairman and CEO of Qualcomm. "We expect this amicable business resolution to form the foundation of a closer relationship with Motorola, one of the earliest supporters of CDMA and one of Qualcomm's first licensees. No longer distracted by our legal disputes, we will be devoting renewed energy to seeking ways of working together to expand the market for CDMA and to deliver increasingly more valuable services for CDMA subscribers."
"Qualcomm was the first company to envision the power of CDMA digital technology for commercial wireless applications and along with Motorola spearheaded CDMA's acceptance in markets around the world," said Christopher B. Galvin, chairman and CEO of Motorola. "Since the strengths of Motorola and Qualcomm in CDMA technology greatly complement each other, our decision to resolve the current legal issues will enable both companies to mutually leverage those strengths to develop and deliver exciting new CDMA applications to the wireless world."
Motorola, Inc. is a global leader in providing integrated communications solutions and embedded electronic solutions. Sales in 1999 were $30.9 billion.
Qualcomm Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative digital wireless communications products and services based on the Company's CDMA digital technology. The Company's business areas include integrated CDMA chipsets and system software; technology licensing; Eudora® email software for Windows® and Macintosh® computing platforms; satellite-based systems including portions of the Globalstar™ system and wireless fleet management systems, OmniTRACS® and OmniExpress™. Qualcomm owns patents which are essential to all of the CDMA wireless telecommunications standards that have been adopted or proposed for adoption by standards-setting bodies worldwide. Qualcomm has licensed its essential CDMA patent portfolio to more than 75 telecommunications equipment manufacturers worldwide. Headquartered in San Diego, Calif., Qualcomm is included in theS&P500 Index and is a 1999 FORTUNE 500® company traded on The Nasdaq Stock Market® under the ticker symbol QCOM.
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, the Company's ability to successfully manufacture significant quantities of CDMA or other equipment on a timely and profitable basis, and those related to performance guarantees, 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 26, 1999, and most recent Form 10-Q.