Court Stays Ban on Handset Imports

This is turning out to be a time of mixed fortunes for San Diego-based mobile phone chip manufacturer Qualcomm Inc. Even as the company is fighting a patent infringement case, it has won a stay on a previous order banning customers from bringing mobile phones that use Qualcomm chips into the U.S.

The stay was granted after a U.S. Court of Appeals in Washington made a ruling against the ban imposed earlier by the U.S. International Trade Commission. The court said the imposition of the ban on handset manufacturers and service providers itself was questionable.

In its ruling, the International Trade Commission had earlier said ensuring Qualcomm chips did not infringe on copyright could be possible only by banning import and sales of mobile phones using these chips in the U.S.

Reactions to the stay order have been mixed so far. While lawyers for Qualcomm said the entire cellular industry had been badly affected by the ban slapped by the U.S. International Trade Commission, analysts are of the opinion that while this was temporary relief of sorts for Qualcomm, the matter was not over yet.

Satya Chillara, an analyst based out of San Francisco for Pacific Growth Equities, said it is not always that a court grants a stay on a ruling made by the U.S. International Trade Commission. He said the relief for Qualcomm would only be temporary.

One set of people who are satisfied with the ruling are the handset manufacturers. These include companies like LG Electronics Inc., Kyocera Wireless Corp., Samsung Electronics Inc., Motorola Inc., and even AT&T Inc., which is the biggest provider of wireless services in the U.S.

From the day the ban was imposed, these manufacturers have raised their voices in protest, stating they should not have to pay the price for an infringement Qualcomm made.

The company whose technology Qualcomm is said to be infringing on, Irvine-based Broadcom Corp., has said the order passed by the court was for the handset manufacturers only. It did not mean Qualcomm would be allowed to continue its infringement of their technology. It said the ban on Qualcomm was still in place.

General Counsel David Dull echoed the sentiments at Broadcom when he said they were happy Qualcomm could not infringe on Broadcom’s patent while the appeal made by Qualcomm was being heard in court.

Qualcomm is the second largest manufacturer of chips for cellular phones. The leader in this domain in Texas Instruments, Inc.