Broadcom Corp., a provider of semiconductors for wired and wireless communications located in Irvine, Calif., announced on Friday that a federal jury in San Diego found that it had not infringed two patents for digital video compression owned by wireless technologies developer Qualcomm Inc., and that Qualcomm had not dealt honestly and in good faith with the US Patent and Trademark Office. The nine-member US District Court jury rejected Qualcomm's claims of infringement following a nine-day trial. The patents in question are US Patents Nos. 5,452,104 and 5,576,767 relating to techniques for compressing digital video signals for more efficient storage or transmission, which Qualcomm had alleged were infringed by Broadcom's integrated circuits for use in high-definition set-top cable and satellite television boxes and certain other high-definition video equipment. In addition to finding the two patents not infringed, in an advisory opinion to the judge the jury found that Broadcom provided convincing evidence that Qualcomm knowingly violated a duty to disclose its patents to the Joint Video Team (JVT), or its parent organization, during the JVT's preparation and eventual adoption of the video compression industry standard known as the H.264 standard. Broadcom said Qualcomm tried to "unfairly leverage the H.264 standard" by requesting royalties for a single patent that are "twice the amount charged by the entire MPEG LA licensing organization for its pool of 160 essential patents" and that Qualcomm attempted to enjoin Broadcom's future sales of H.264-compliant products. Qualcomm argues that Broadcom started litigation when it became dissatisfied with the way license negotiations were going between the two companies in 2005, and filed the patent and antitrust complaints soon after. Qualcomm said it was compelled to file litigation to enforce its patents against Broadcom "in response to Broadcom's attacks and not because Qualcomm was targeting the video compression industry as Broadcom has claimed." In a second advisory opinion to the judge, the jury sided with Broadcom in deciding that Qualcomm "committed inequitable conduct" before the US Patent and Trademark Office (USPTO) by breaching its duty of honesty and good faith in dealings with the office. The judge must now decide whether Qualcomm had waived its rights to enforce either of these patents against Broadcom by virtue of Qualcomm's participation in a video standards-setting body, and whether Qualcomm had engaged in conduct before the Patent Office during the application process that would render either of the patents unenforceable. "This is a victory not just for Broadcom but for the entire digital video community, against an attempt by Qualcomm once again to tax an important new technology -- in this instance based upon the claims of a single patent. The trial not only showed that Qualcomm was wrong about Broadcom's alleged infringement, but also cast a bright light on Qualcomm's penchant for abusing the rules and procedures of industry standards-making bodies," said David A. Dull, Broadcom's senior vice president and general counsel. "We have prosecuted thousands of patent applications in the US Patent Office over the past two decades and have worked very hard to be candid and forthright in all of our dealings there. Similarly, we have carefully followed the rules and IPR policies of the many standard-setting organizations in which we participate. Standards are very important to our business, and the integrity of standard-setting organizations matters to us very much. We believe a careful examination of the facts does not support either of the jury's advisory verdicts,” said Lou Lupin, executive vice president and general counsel for Qualcomm. This is Broadcom's second recent win against Qualcomm involving intellectual property issues. Last fall, a US ITC judge ruled that Qualcomm's cellular baseband chips infringe five claims of a Broadcom patent. The full commission affirmed that ruling in December and is now considering remedies against many Qualcomm products. The ITC action was the first of several patent disputes between the companies to go to trial. Broadcom said it is in the final stages of preparing additional patent infringement cases against Qualcomm concerning cellular baseband chips. In March 2007, the US District Court in San Diego is scheduled to try Broadcom's claims that Qualcomm infringes two Broadcom patents relating to Bluetooth technology in cellular phones. Then in May 2007, the US District Court in Santa Ana, Calif. is scheduled to try Broadcom's claims that Qualcomm infringes three additional Broadcom patents relating to cellular technology. Broadcom said it has infringement claims from 14 of its patents awaiting trial against Qualcomm. Qualcomm said it has four patent infringement lawsuits against Broadcom that are to be tried before the end of the summer of 2007, and it also has a case pending against Broadcom for misappropriating Qualcomm's trade secrets. In other actions, Broadcom has joined five other mobile wireless technology companies in filing complaints with the European Commission alleging that Qualcomm has engaged in anticompetitive conduct in the licensing of its patents and the sale of its chipsets for mobile wireless devices and systems. The six companies assert that Qualcomm is violating EU competition law and failing to meet the commitments it made to international standards bodies to license its technology on fair, reasonable and non-discriminatory terms. The companies have filed similar complaints before the Korean Fair Trade Commission. Broadcom is also appealing last year's dismissal without prejudice of its federal antitrust lawsuit against Qualcomm. The dismissal, by a judge in New Jersey, was appealed to the US Court of Appeals for the Third Circuit in September 2006. For more information, visit: www.broadcom.com or www.qualcomm.com