Verizon cuts deal with Broadcom

In a surprising move, Verizon Wireless announced that it had entered into a licensing deal with Broadcom so it can continue to import and sell devices that are the subject of a patent dispute between Broadcom and Qualcomm.

The International Trade Commission (ITC) earlier this summer ruled in favor of Broadcom and issued a ban on the import of new cell phones made with Qualcomm 1xEV-DO and WCDMA chipsets [1]. The ITC said those chipsets infringe upon patents held by Broadcom. Verizon has agreed to pay Broadcom to use the disputed chip technology in its phones. Verizon now says it will pay Broadcom a rate of $6 per 1xEV-DO handset, PDA or data card sold after the effective date, subject to a maximum payment of $40 million per calendar quarter and a lifetime maximum payment of $200 million.

Nancy Stark, spokeswoman at Verizon Wireless, said the carrier decided to go this route so that it could take its customers out of the middle of this patent dispute.

Does the move undermine Qualcomm's strength in fighting the ITC's decision?

Qualcomm got some more bad news on Friday when a federal court dismissed the chip maker's request to delay the ITC's import ban. 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 ITC's decision.

For more about Verizon's deal with Broadcom and the federal court's decision:
- read this piece [2] from sister publication FierceWireless
- take a look at this article [3] from AP
- see this release [4]