Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of Code Division Multiple Access (CDMA) and other advanced wireless technologies, today stated that it is extremely disappointed with the International Trade Commission (ITC) decision to ban the import of future models of 3G mobile broadband handsets incorporating Qualcomm chipsets and software accused of infringing a Broadcom patent. Although all of the Commissioners agreed that a disruption in the supply of EV-DO and WCDMA handsets would negatively impact the public interest and public safety, the remedy fashioned by the majority does not protect the public interest or public safety. Qualcomm will ask the Federal Circuit Court of Appeals to stay enforcement of the ITC's order and ask the President to veto the ITC's decision. Qualcomm maintains that Broadcom's patent is invalid and not infringed.
Having chosen not to develop an EV-DO solution and having failed in the marketplace to generate interest in its WCDMA products, Broadcom brought this litigation against Qualcomm but has used it as a vehicle to attack the U.S. cellular industry, even though Broadcom has never accused any wireless manufacturers or operators of infringement or any other wrongdoing. The public injury that would result from the remedy imposed by the Commission is grossly disproportionate to any benefit flowing to Broadcom from such broad enforcement of a recently-purchased patent. Broadcom does not make or sell EV-DO chips, and Broadcom's claims that it can supply WCDMA products for the United States have been rebuffed by WCDMA operators in submissions the operators made to the ITC.
Qualcomm and the U.S. wireless industry will seek an emergency stay from the Federal Circuit and a Presidential veto of the ITC's ruling on several grounds, including that Broadcom's ITC action will harm U.S. consumers, impact public safety and national security and harm the U.S. economy by stunting mobile broadband deployment. By punishing completely innocent cellphone manufacturers and wireless operators that were given no opportunity to contest Broadcom's infringement claims, the ruling also raises serious issues of due process and fairness. In addition, Qualcomm and its partners have invested heavily in providing products that enabled E911 emergency call centers to locate wireless subscribers. Affordable new phone designs, which further improve the performance and accuracy in emergency situations, will be impacted by this order.
“While there is no immediate disruption to Qualcomm's ability to import chips, this decision does immediately affect third parties who were not even permitted to appear in the infringement proceeding,” said Dr. Paul E. Jacobs, CEO of Qualcomm. “We believe the Commission has not afforded manufacturers and operators, who will bear the brunt of this order, an adequate opportunity to defend their interests. In declining to ban existing products, the Commission recognized the adverse impact of a downstream remedy to the public interest, but decided on a measure that will limit consumer choice and access to mobile broadband services, be harmful to operators, manufacturers and the economy, and pose risks to public safety communications. The Commission's own chairman declared that the order would adversely affect the public interest. We will ask the White House to veto this decision and avoid turning back the clock on the tremendous gains that have been achieved in mobile broadband communications, disaster preparedness and emergency response. The wireless industry and public safety community have been working on robust interoperable networks for first responders and this order derails those efforts. A seamless, interoperable public safety mobile broadband network is integral to the next generation of emergency response. The way for the industry, public safety and end users to move forward with certainty is for the President to veto this order.”
Qualcomm Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative digital wireless communications products and services based on CDMA and other advanced technologies. Headquartered in San Diego, Calif., Qualcomm is included in the S&P 500 Index and is a 2007 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 the Company's ability to successfully design and have manufactured significant quantities of CDMA components on a timely and profitable basis, the extent and speed to which CDMA is deployed, 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, 2006, and most recent Form 10-Q.