U.S. Trade Commission Partially Bans Mobile Phones With Qualcomm Chips

The ban is expected to affect advanced cellular phones sold by Verizon Wireless, AT&T, Sprint Nextel, and T-Mobile USA.

The U.S. International Trade Commission on Thursday issued a partial ban on the importation of mobile phones containing Qualcomm chips, an order that will have an impact on major wireless carriers.

The ITC action stems from an ongoing patent dispute between Qualcomm and rival Broadcom. In May, a federal court jury in California found that Qualcomm had infringed on three Broadcom patents, and awarded the latter company $19.6 million.

The ITC order bars the importation of new handsets or personal digital assistants that contain Qualcomm chips and chipsets that are used in connecting devices to so-called 3G, or third generation, high-speed networks used to deliver data services, such as video, music and Web access. Carriers offering such networks include Verizon, Sprint, and AT&T.

The commission voted 3-2 in favor of the ban, which followed the ITC's previous ruling that certain Qualcomm chips were imported into the United States in violation of federal laws protecting intellectual property. The ban does not apply to handsets and handheld computers that are of the same models as devices imported into the U.S. before the June 7 order.

"However, the order does bar the importation of new models of handheld wireless communications devices that contain Qualcomm's infringing chips and chipsets," the ITC said in a release. "Thus, the order 'grandfathers' models of handheld wireless communications devices being imported into the United States for sale to the general public on or before June 7, 2007."

Bart Showalter, chair of the intellectual property practice at the law firm Baker Botts in Dallas, said the ITC does not award monetary damages, but it tends to resolve importation disputes at a "very fast pace that puts significant pressure on the accused infringers."

"ITC exclusion orders can be a very powerful legal remedy to prevent importation of infringing devices, in this case, cell phones," Showalter said in an e-mail.

The commission's order goes into effect in 60 days, unless President Bush issues a veto. The ban is expected to affect advanced cellular phones sold by Verizon Wireless, AT&T, Sprint Nextel, and T-Mobile USA.

Qualcomm and Broadcom have been engaged in acrimonious legal exchanges for several months over patents for mobile phones. Broadcom claims it is protecting its financial investment in its intellectual property, while Qualcomm has countered that Broadcom purchased the patents at issue in the case.

This article was edited on June 7 to include analyst comments

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