| A federal court on Friday dismissed a request by Qualcomm Inc. to delay an import ban on new cell phones containing the company's chips, which were were found to infringe patents held by Broadcom Corp. The decision comes a day after Verizon Wireless cut a deal with Broadcom that analysts said makes it less likely the Bush administration will overturn the ban, as Qualcomm has urged. The U.S. Court of Appeals for the Federal Circuit said it did not have jurisdiction to consider Qualcomm's request, because the import limits are still under review by the Bush administration. The administration has until August 6 to decide whether to veto the import limits. The U.S. International Trade Commission imposed the ban June 7 after ruling that San Diego-based Qualcomm's chips infringed a Broadcom patent on battery power-saving technology. The court "made no determination of the substantive merits" of Qualcomm's appeal, said Emily Kilpatrick, a spokeswoman for the company. Qualcomm will renew its appeal and seek a delay in the ban after Aug. 6 if the administration does not reverse the import limits, she said. The ITC's ruling allows the importation of cell phone models available as of June 7, but bans new models with infringing chips. The ruling will limit the availability of cell phones compatible with high-speed wireless data networks built by Verizon Wireless, an affiliate of Verizon Communications Inc., Sprint Nextel Corp. and AT&T Inc.'s wireless division. Mobile phone makers LG Electronics Inc., Motorola Inc. and Samsung Electronics Co. will also be hit. The wireless carriers and phone manufacturers joined Qualcomm's appeal and the carriers have also supported its lobbying efforts in Washington. But in an additional blow to Qualcomm, Verizon Wireless yesterday withdrew its support after striking a deal with Broadcom to license its technology. Verizon Wireless agreed to pay Broadcom $6 for each phone with an infringing Qualcomm chip, up to $40 million a quarter or $200 million over the life of the agreement. Rebecca Arbogast, a telecommunications analyst at investment bank Stifel, Nicolaus & Co. Inc., said Verizon Wireless's move "substantially reduces the chance there will be a presidential veto." Verizon Wireless was a driving force behind the wireless carriers' efforts in support of a reversal of the ban, Arbogast said. The company is a member of CTIA, the wireless industry's top lobbying group, which has urged the administration to overturn the ITC's ruling. John Walls, vice president for public affairs, said CTIA still supports a presidential veto. The deal between Broadcom and Verizon Wireless also demonstrates that a commercial solution to the dispute exists, Arbogast said. Presidential vetoes of ITC decisions are rare, with the most recent in 1987, an ITC official said last month. The White House will defer to the recommendation of the Office of the U.S. Trade Representative, as it has on ITC rulings since 2005. Meanwhile, five Republican members of the House Energy and Commerce Committee wrote U.S. Trade Representative Susan Schwab July 12 in support of a veto. The ITC's order "will stifle the efforts of wireless carriers to deliver cutting-edge technologies to American consumers," said the letter, which was signed by Reps. Joe Barton of Texas and Cliff Stearns of Florida, among others. New York Democrats Rep. Charles Rangel and Sen. Charles Schumer also wrote administration officials last week against the ban. Broadcom's chief executive Scott McGregor said Thursday that Qualcomm "appears...to have bet their future...on their political lobbying skills." |
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