Another day, another injunction. Qualcomm
The latest ruling came from a federal court in California, where Qualcomm was already found to infringe on three Broadcom patents. The terms of the injunction vary across different products and time periods, however, with certain chips shipped before the May jury verdict exempt for a "sunset" period until January 2009, if Qualcomm pays a set royalty on the devices.
Qualcomm has already begun designing workarounds for the products affected. It announced availability of new pin and software-compatible replacement chips, along with a press release describing the ruling. Still, Qualcomm conceded that there will be some near-term impact. It also needs more clarity on the ruling, such as how the license between Verizon Wireless -- a joint venture between Verizon Communications
The real damage from the lawsuit is the distraction this causes to Qualcomm. Rather than working to develop new designs, engineers are backtracking to meet court orders. It also strains customers' relationships, since it threatens plans for carriers such as AT&T
A willingness by the courts to mandate royalty rates also has the potential to be used and abused at the same time the U.S. seeks to streamline intellectual property licensing. Whether Qualcomm will ultimately be on the winning or losing end of this new licensing world is still undetermined.
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Fool contributor Dave Mock wants a sunset provision for his tax bill this year. He owns shares of Qualcomm and is the author of The Qualcomm Equation. The Fool's disclosure policy floats like a butterfly and stings like a bee.