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Wed, Aug 08, 2007 - Page 10 News List

US trade representative upholds ban on handsets containing Qualcomm chips

AP , SAN DIEGO

The administration of US President George W. Bush upheld an import ban on cellphones that contain Qualcomm Inc chips, further threatening the introduction of new handsets.

US Trade Representative Susan Schwab said on Monday she was sticking to a long practice of declining to overrule the US International Trade Commission (ITC) unless conditions were "extraordinary." The executive branch has overruled the ITC only five times, most recently in 1987.

In June, the ITC banned imports of new, high-end phones that run on Qualcomm chips, raising doubts about the introduction of some models from carriers, including Sprint Nextel Corp and manufacturers like LG Electronics Inc and Samsung Electronics Co.

The ITC ruling came in a patent dispute between Qualcomm and rival chipmaker Broadcom Corp. The commission found that Qualcomm infringed on a patent that protected Broadcom's technology to conserve battery power.

Schwab said industry players are working on alternative products to avoid the ban. She said a Department of Homeland Security review found insufficient justification for overturning the order on grounds that it would create problems for public safety agencies.

Qualcomm said it would ask the US Court of Appeals for the Federal Circuit in Washington to reverse the ban and put it on hold while its appeal is considered.

Qualcomm chief executive officer Paul Jacobs said in a statement that he was disappointed but added Qualcomm would pursue "all legal and technical options available" to limit the impact on consumers.

The ban applies to the high-speed EV-DO and WCDMA network technologies, which allow users to more quickly surf the Internet and download music and video.

Qualcomm is using alternative software designed to escape the ban, but Broadcom may claim that it also infringes on its patent, Qualcomm attorney Alex Rogers said.

A Broadcom attorney, David Rosmann, said he was unaware of Qualcomm's change and would reserve judgment until the company has a chance to review it.

Schwab acknowledged worries that the ban may slow the launch of third-generation handsets, but said Broadcom's licensing deals with "two major wireless carriers" would soften the impact.

Verizon Wireless, whose phones run on Qualcomm chips, struck a deal with Broadcom last month to pay for each phone it sells that carry one of Qualcomm's patent-infringing chips, ducking the ban and depriving Qualcomm of a powerful ally in its legal fight.

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