Wireless chipmaker Broadcom Corp. has revealed on Friday that it had launched a new legal battle against Qualcomm Inc., accusing its rival of unfair competition, fraud and breach of licensing contracts. The two companies have been locked in numerous patent infringement disputes, including one in which Broadcom wanted an import restriction on phones with specific Qualcomm chips. Broadcom in its lawsuit has accused Qualcomm of inappropriately concealing its patents, breaking agreements on licensing commitments and exercising market supremacy through clandestine associations.
The company wants to block Qualcomm from enforcing some patents and is demanding unspecified damages. The lawsuit, filed in California Superior Court in Orange County, draws similarity with the complaint that Broadcom and a group of telecommunications equipment companies filed with the European Commission. Five other companies, including handset maker Nokia Corp. equipment vendor L.M. Ericsson Telephone Co. and chip maker Texas Instruments Inc. joined Broadcom in its complaint against Qualcomm.
San Diego-based Qualcomm has been the subject of several complaints and lawsuits, which it energetically defends. The firm is also involved in fierce patent related battle with Nokia regarding the amount of royalties both sides should pay to put into next-generation wireless devices. As a matter of fact firms have noticeably overstated many of the legal actions they are taking to build pressure on rivals or influence public opinion. These actions however make it tough for investors to interpret their true meaning.
Since most of the legal battles of this category get settled, or their verdicts get appealed or challenged, experts are of the view that there will be least near-term impact on Qualcomm. On the other hand, investors who usually react by buying or selling shares have now understood that this drama essentially almost never amounts to anything except for potential business distraction and higher operating costs.
