Broadcom Corp. (NASDAQ: BRCM) shares are trading higher after Friday evening saw a statement from an International Trade Commission judge that recommended the end of an investigation into a Qualcomm (NASDAQ: QCOM) - Nokia (NYSE: NOK) dispute. Broadcom has a similar dispute and while some phones were banned in the US because of this issue, BRCM received a stay while appeals are heard. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BRCM.

The stock has climbed sharply over the past two months, hitting a one-year high of $43.07 last week. BRCM opened this morning at $40.32. So far today the stock has hit a low of $40.30 and a high of $41.52. As of 11:15, BRCM is trading at $41.08, up $0.53 (1.3%). The chart for BRCM looks bullish but deteriorating slightly, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $32.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in just 3 months as long as BRCM is above $32.50 at January expiration. Broadcom would have to fall by more than 20% before we would start to lose money. Learn more about this type of trade here.

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.

Apple finished today at $57.61, down 72 cents. The negative news for Apple today was that the other MP3 device company Creative has gotten the International Trade Commission to launch an investigation into whether the iPod infringes on Creative's patents for the Zen player. Creative's stock rose some 5% today as news came out.

Creative is trying to overthrow Apple, but Apple is pretty firmly cemented in the #1 position for digital music players. As a result Creative and Apple have been circling each other like a pair of territorial yard dogs, with both companies filing patent complaints against each other over the last year.

[Disclosure: I own Apple stock at the date of this post]