The International Trade Commission (ITC) has banned imports of some cell phones containing chip technology from Qualcomm (NASDAQ: QCOM). The ITC has said that the ban covers cell phones that infringe on a patent held by Broadcom (NASDAQ: BRCM) and that were imported for sale after June 7. The majority of the cell phone import world is up in arms, claiming that the ban will do irreparable harm to the American consumer. Frankly, those that choose to infringe on patents shouldn't be importing technology they aren't ready to sit on when discovered.
James Gerace, spokesman for Verizon Wireless, claims that the ban "essentially attempts to freeze innovation in cell phones." A more accurate interpretation would be that the ban seeks to freeze piracy that circumvents innovation. A Red Herring article says that Sprint Nextel (NYSE: S) has openly declared that it expects to sell 5 million phones this year that contain the infringing technology. That's a pretty bold statement by Sprint, and in light of the current ban, I think it's a pretty stupid statement also. That would be similar to me stopping at the local police station to tell them I plan on driving over the speed limit for 500 miles this year.
AT&T (NYSE: T) doesn't seem to care much about the cell phone ban. It has plenty of handsets available that don't contain the infringing chips. AT&T thought ahead and based the majority of its offering on a different technology. Might we call that decision prudent?
Meanwhile, as the pirates cry and whine about appeals and a stay of execution, Broadcom has eloquently made clear that it will consider discussion about licensing of the patent.
Will Rich Ross really have a positive impact on Disney's movie operations?
Consumers sick of recession, may spend extra on holidays
Corrections, seasonality and Santa Claus
Reader Comments (Page 1 of 1)
6-10-2007 @ 11:44PM
sina said...
"AT&T thought ahead and based the majority of its offering on a different technology. Might we call that decision prudent?"
When AT&T chose GSM technology over CDMA (developed by Qualcomm), it had very little to do with patents.
In fact, technologically it was an inferior decision, since AT&T are now having to create a W-CDMA network from scratch in order to provide similar 3G services to Verizon and Sprint.
6-10-2007 @ 11:45PM
Russell Pearson said...
Qualcomm should serious consider buying Broadcom and bring this game to a conclusion.
6-10-2007 @ 11:46PM
Bob Bobson said...
A major issue (which you complete miss) is that the US patent system is horribly broken. The patent office too easily grants patents that are 'obvious' and contain minimal or no innovation. If you actually read that patent that Qualcomm is infringing, you'll see that this is exactly the case. The patent is so basic and simple, that I'm sure just about every cell phone manufacturer is violating it. It's just that Broadcom is only interested in going after Qualcomm in order to force a broad patent cross-licensing between the companies. It's also interesting to note that Broadcom didn't even create this particular patent. They bought it from a patent holding company (likely for the purpose of attacking Qualcomm).
Before you accuse Qualcomm of stealing technology and piracy, you should actually read the patent in question.
6-21-2007 @ 2:08AM
dave shawn said...
I like the idea from Bob. Nobody should pay anyone --including Qualcomm's CDMA, because that was not invented by Qualcomm! I worked there in a chip group I know (and anyone major in telecommunication will understand these claims are so obvious), but they were patented. Will this world be better if we all just build products only use ourown know-how ?