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Court puts hold on Qualcomm import ban

  Breaking Legal News  -   POSTED: 2007/09/13 15:51

South Korean handset makers on Thursday welcomed a US appeals court ruling that halted an import ban on mobile phones containing Qualcomm’s 3G chipsets, a legal victory in the chipmaker’s patent dispute with rival Broadcom. The court’s stay, pending appeal, would allow third parties including LG Electronics, Motorola, Samsung Electronics, Sanyo and AT&T to import certain handsets into the US.

Samsung and LG are key Qualcomm customers and were seen as the most likely victims of the ban announced in June. But the companies said that their US business had so far not been affected by the ban, which was supposed to take effect from this month. Both groups had been making alternative supply arrangements.

LG, which has heavy exposure to the US CDMA market, said: ”The ban might have depressed the whole US handset market.”

Samsung also welcomed the ruling.

The news drove LG’s shares up 4.25 per cent to Won76,100 and Samsung’s 0.36 per cent to Won562,000, while the broader market closed up 1.9 per cent yesterday.

On Wednesday, a judge in Washington agreed that the third parties had demonstrated ”a substantial case on the merits and the harm factors weigh[ed] in their favour”.

LG shipped 37 per cent of its total handset sales to the US last year. It sold 64m units of handsets last year and controls 15.2 per cent of the US market. Samsung sold 27 per cent of its total handset sales, which amounted to 37.4m units, in the US in the second quarter, according to Nomura International.

The International Trade Commission on June 7 imposed the ban after finding that Qualcomm had infringed a Broadcom power-saving patent. The two sides have been unable to reach agreement on compensation out of court.

Alex Rogers, legal counsel for Qualcomm, said: ”We are pleased that the court of appeals recognised the undeserved harm to parties who were not named in the lawsuit, and that our customers will continue to be able to introduce new products into the US marketplace during the appeals process.”

Qualcomm’s technology is included in all 3G handsets, meaning that a full ban on cellphones carrying its chips might potentially have hampered the take-up in the US of the next generation of wireless technology.

In February, LG, which has strength in the 3G business, won a contract from GSM Association to supply a low cost handset for 3G mobile phone networks under the banner ”3G for All”.


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