Broadcom fires a salvo at Qualcomm

The chief executive of Broadcom Corp. urged a government panel Wednesday to bar imports of cellphones that include chips made by Qualcomm Inc. that infringe its patents.

Appearing before the U.S. International Trade Commission, Scott McGregor and other representatives of Irvine-based Broadcom said a ban would not hurt the public, disrupt the wireless telecommunications market or threaten public safety, as Qualcomm and its supporters have argued.

If the commission grants Broadcom’s request, “things will continue just as they have, with the exception that a subset of cellular devices that contain infringing ... chips would no longer be available to be imported into the United States,” McGregor said.

But Irwin Jacobs, chief executive of San Diego-based Qualcomm, strongly disagreed.

Barring the handsets would make it harder for customers to gain access to high-speed wireless networks used to download music and video, Jacobs said, and discourage further development of such networks.

Qualcomm and several government agencies have also argued in filings with the International Trade Commission that an import ban would harm public safety agencies that use wireless networks.

Broadcom is asking the commission to block imports of cellphones that contain Qualcomm chips using high-speed EV-DO and WCDMA technologies. EV-DO is used by Verizon Wireless and Sprint Nextel Corp.

The chip technology at issue helps conserve cellphone battery power. A trade commission administrative law judge found last year that Qualcomm’s chips violated Broadcom’s patents. The judge recommended that imports of the chips themselves be banned, but not cellphones that include the chips.

Broadcom, however, argued that most infringing chips enter the U.S. already incorporated into handsets made by companies such as Motorola Inc. and Samsung.

The trade commission is considering the administrative law judge’s recommended remedy as well as Broadcom’s request. The commission will balance the proposed remedies against their impact on the broader economy and other public interest factors. The two-day hearing is the first the commission has held on remedies in an intellectual property case since 1993.

Shara Aranoff, vice chairman of the commission, expressed concern about the effect of an import ban on wireless carriers that have developed networks using the EV-DO and WCDMA technologies.

Verizon Wireless and Sprint Nextel are prepared to testify against Broadcom’s request today. The proposed ban would “cripple the most advanced and most widely deployed broadband technology in the United States,” by limiting the availability of handsets compatible with EV-DO, Verizon Wireless said in papers filed with the commission.

Broadcom CEO McGregor said Verizon and Qualcomm’s arguments “imply that the infringement is too big, too widespread and too profitable to stop.”

But “that simply cannot be right,” he said.

McGregor said Broadcom had narrowly tailored its remedy to bar only new imports of cellphones and not so-called smart phones such as Palm Inc.’s Treo and Research in Motion Ltd.’s BlackBerry, or data cards that could be used in laptops.

As a result, McGregor argued, consumers would still be able to get access to the high-speed networks offered by Verizon Wireless and Sprint Nextel.

The dispute at the trade commission is just one of several patent fights between Broadcom and Qualcomm. Both companies agreed Friday to settle two unrelated patent lawsuits.

The commission has said it will complete its investigation by May 8. If the commission issues a remedy, the White House has 60 days to approve or disapprove it.

Qualcomm shares rose 69 cents Wednesday to $43.73. Broadcom fell 16 cents to $33.40.