Federal Court Dismisses Broadcom’s Antitrust Complaint Against QUALCOMM
SAN DIEGO — September 01, 2006 — QUALCOMM Incorporated (Nasdaq: QCOM), a leading developer and innovator of Code Division Multiple Access (CDMA) and other advanced wireless technologies, today announced that the United States District Court for the District of New Jersey has dismissed Broadcom’s antitrust complaint against QUALCOMM in its entirety. Originally filed in July of 2005 and later amended, the complaint alleged a variety of purported antitrust violations by QUALCOMM, each of which was rejected by the District Court. In a 47-page opinion (see copy of the Court’s Judgment and Opinion at: http://www.qualcomm.com/press/broadcom_judgment.html), the Court held that QUALCOMM’s sales and licensing activities as alleged by Broadcom “do not support an inference that competition in the UMTS chipset market is, or will be injured by QUALCOMM’s licensing practices.” As to the complaint’s allegations regarding QUALCOMM’s purported refusal to grant Broadcom a license for patents essential to the WCDMA 3G cellular standard on so-called FRAND (fair, reasonable and non-discriminatory) terms, the Court held “that QUALCOMM’s alleged conduct does not support claims for monopolization or attempted monopolization.”
“QUALCOMM is pleased by the Court’s thoughtful and comprehensive ruling dismissing all of Broadcom’s claims,” said Steve Altman, president, QUALCOMM. “Our business model is built upon making our innovations available to the entire wireless industry through the widespread licensing of our intellectual property and the creation and supply of advanced chipsets and software solutions. These activities foster competition among device manufacturers and service providers to the benefit of the industry and consumers. As our more than 135 license agreements with the world’s leading telecommunications equipment manufacturers demonstrate, QUALCOMM has scrupulously abided by its commitments to standards development organizations to offer licenses for its essential patents on fair and reasonable terms.”
For the limited purpose of ruling on QUALCOMM’s motion to dismiss, the Court was required by applicable law to treat Broadcom’s allegations in the complaint as true. Nevertheless, the Court held that Broadcom failed to state any viable antitrust claim. The Court pointed out that even Broadcom itself did not claim that QUALCOMM had refused to license its patents to Broadcom but rather that Broadcom had rejected QUALCOMM’s offer and was unable to participate in the 3G chipset business for that reason. The Court noted that “the elements of Sherman Act violation do not inhere in failed negotiations” and it “is not the judicial role to readjust the risks in high stakes commercial dealings.”
The Court’s order grants Broadcom leave to move to further amend the complaint in an attempt to allege a viable claim.
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 2006 FORTUNE 500® company traded on The Nasdaq Stock Market® under the ticker symbol QCOM.
QUALCOMM is a registered trademark of QUALCOMM Incorporated. All other trademarks are the property of their respective owners.
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