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Jury in Broadcom-Qualcomm spat saves TiVo's and Apple's bacon, but MPEG-4 situation is muddled

Mon, 01/29/2007 - 6:38am
Brian Santo, CED

A federal jury has decided that Broadcom Corp. is not infringing two patents for digital video compression owned by arch-rival Qualcomm.

Qualcomm had claimed that certain Broadcom chips infringe its patents. Those chips are incorporated in tens of millions of consumer products, including Apple's video iPods, TiVo DVRs, various high-definition DVD players, and some cable and satellite TV set-top boxes. Had Qualcomm won, Broadcom would have been enjoined from making those chips, and manufacturers of products using them would have lost a critical supplier.

In the process of suing Broadcom, Qualcomm asserted one of its patents is fundamental to the H.264 standard (aka MPEG-4 Part 10 or AVC).

The jury concluded the patents are valid; they simply do not apply to the Broadcom products. But that left open another can of worms.

The jury issued an advisory opinion that Qualcomm had knowingly violated a duty to disclose its patents to the Joint Video Team during the JVT's preparation and eventual adoption of the H.264 standard. In a second advisory opinion, the jury also agreed with Broadcom that Qualcomm had committed inequitable conduct before the U.S. Patent and Trademark Office (USPTO) by breaching its duty of honesty and good faith in dealings with the USPTO.

Translated, that means that even if the Qualcomm patents are valid, the company's participation with the JVT in setting the H.264 standard and the nature of its representations to USPTO may have rendered the patents unenforceable. Qualcomm said the next step is for a judge to determine whether those patents are enforceable or not.

If they are enforceable, that may have quite an effect on the H.264 market.

During the trial, evidence was presented that Qualcomm requested for the single patent allegedly reading on H.264 a royalty that would have been twice the amount charged by the entire MPEG LA licensing organization for its pool of 160 essential patents on H.264 (the MPEG LA represents a large subsection of the patents that apply to H.264, but not the entire pool).

Multiple companies have contributed patented technology to the H.264 standard, with a general agreement among them that license fees on all contributed patents be kept low, so that it will be economically viable for third parties to actually use it. So left up in the air is whether or not the licensing fee for H.264 will increase dramatically or not.

Furthermore, the recent jury decision was the finale of only one battle between the two companies, not the long-running war, which ranges over a variety of technologies, but arose from a joint effort in cell phone technology that went sour. Qualcomm has a very strong patent position in cell phone technology; Broadcom is still trying to establish itself in that market.

The failure of the joint effort almost immediately resulted in the launch of dozens of suits and countersuits.

Later this year, the courts are scheduled to hear two patent infringement suits Broadcom has brought against Qualcomm, one regarding the use of Bluetooth in cell phones, the second concerning other cellular technologies.

The bitter rivals have well over a dozen patent disputes beyond those two that have yet to be scheduled for hearings, in addition to a variety of anti-trust suits against each other filed all over the world.

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