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The summer of 2007 is shaping up to be even more miserable for wireless technology provider Qualcomm. A week ago, the Bush Administration denied Qualcomm’s request to overturn an International Trade Commission ban on using several of its chips used in 3G handsets because they infringed three patents belonging to Broadcom Corp.  Now, a U.S. District Judge in Santa Ana, Calif., has doubled the amount Qualcomm must pay Broadcom in damages in that long-running dispute -- $39.3 million, along with Broadcom’s attorney fees.

In May, a federal jury in Santa Ana found Qualcomm had “willfully infringed” the three Broadcom patents, awarding the company $19.64 million in damages.

Explaining the rationale behind doubling the damage award, U.S. District Judge James Selna said, “There is a spectrum of improper conduct for determining the amount to award. That Qualcomm conduct was not at the most egregious end of the spectrum does not mean that no enhanced award is due.”

Clearly, Qualcomm is on the hot seat. Shortly after the Bush Administration denied Qualcomm’s request to overturn the ITC ban, a U.S. District Court judge in San Diego found that Qualcomm engaged in “aggravated litigation misconduct” and “intentional abuse of industry standards bodies” in an infringement dispute with Broadcom involving two video compression patents. Consequently, the court ruled Qualcomm had waived its rights to enforce the patents and awarded Broadcom its attorneys’ fees and costs in that case.

A magistrate judge in the San Diego district court has ordered 14 Qualcomm attorneys to appear at an Aug. 29 hearing to address sanctions.

The increasing pressure on Qualcomm was a likely factor in the resignation of Lou Lupin, the company’s general counsel, on Monday. Carol Lam, senior vice president and legal counsel, will serve as acting general counsel until a permanent replacement is found.

Qualcomm maintains Broadcom’s patent claims are not valid, and has stated it would appeal and renew its request for a stay of the ITC’s decision banning 3G handsets that use the infringing Qualcomm chips.


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