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President Upholds Qualcomm Cell Phone Chip Ban

Richard Baguley Published on August 06, 2007 Comment on this

Aug 6th 2007 - Qualcomm were hoping that George W Bush would drop the ban on importing phones that use some of their chips, but the Administration had decided to let the ban continue. Qualcomm were hoping that the ban on the chips (which allegedly violate several patents held by rival Broadcomm) would be lifted after they claimed that it was an unfair restraint of trade, but the president decided to to let the ITC ban stand, blocking the import of many phones that use the chips.

The Bush administration decided that the import ban should stand, as the issues of intellectual property were more important than the problems the ban is causing Qualcomm. In the ruling which was issued today, the US Trade Commissioner Susan Schwab said that she had decided "to permit the limited exclusion order and cease and desist order that the US ITC issued in its investigation". This means that the ban will continue, with the import of handsets that use the disputed chips being blocked.

Broadcomm were, unsurprisingly, happy at the result, with David A. Dull, Broadcom's Senior Vice President and General Counsel saying that "We are gratified by the decision of U.S. Trade Representative Susan Schwab not to intervene in this case... In upholding the ITC remedy, the Administration is also encouraging a market-based solution to patent issues that is in the best interests of American consumers, U.S. companies and global patent protection."

Qualcomm claim that they aren't giving up, though; they said this evening that they are working on an appeal, and will be applying for another stay on the ban. Paul E. Jacobs, CEO of Qualcomm said that “We will pursue all legal and technical options available to us to minimize the impact of the ITC order on consumers, our customers and the entire wireless industry.”

Some cell phone companies are seeking ways to get around the ban, though; Verizon has already agreed to pay Broadcom a licence fee for the patents of $6 per handset, up to a maximum of $200 million, which will allow them to get around the import ban. Sprint has got around the ban by using a software patch that disables the disputed functions. However, they will probably be looking for a better long term solution in the near future.