A Federal Circuit Appeals Court ruling threw ‘a wrench’ into Qual...

District Court ordered Qualcomm to pay double damages of $39.3 million and Broadcom attorney fees after a jury determined Qualcomm infringement of three Broadcom patents was “willful” (CD Aug 15 p10). However, District Judge James Selna is now reviewing the order in light of a September Federal Circuit en banc decision tightening the willfulness standard. Selna urged Qualcomm to file a reconsideration petition and subsequently sent the parties a pre-hearing draft of his tentative opinion. Selna said the Federal Circuit case, In re Seagate, meant the jury’s willfulness finding could not stand unless a new trial on all infringement issues was held. Selna also asked Broadcom to decide if it wanted the retrial or would rather cut its losses and accept the original $19.6 million damages award and no attorney fees. If the tentative ruling solidifies, “Broadcom will likely not seek a new trial,” but Qualcomm will push for one, Stifel Nicolaus said. Selna is expected to rule on Seagate’s implications “any day now,” it added. Seagate has “at a minimum” reduced the damages award to $19.6 million, but it’s uncertain whether Selna will void the original trial, it said. “Qualcomm has the stronger legal argument, but courts do not lightly erase a jury trial,” it said. Meanwhile, the threat of an injunction still looms: “Assuming the jury verdict is not set aside, the real risk to Qualcomm… is not the damages award, but rather, the risk of an injunction,” Stifel Nicolaus said. The Supreme Court’s eBay decision, not Seagate, governs the District Court’s injunction ruling, it said. “One of the factors emerging as important in post-eBay patent injunction decisions is whether the two companies compete,” it said. “We understand that Broadcom does not compete with Qualcomm in the areas covered by the patents, although we also understand that Broadcom sought to provide evidence at trial that they have ‘practiced’ each patent. We expect this issue to weigh heavily in the judge’s analysis, but the lack of a record may make that difficult.” Qualcomm is expected to argue that a Broadcom settlement with Verizon Wireless related to Qualcomm chips banned by the International Trade Commission shows “monetary payment is sufficient” and an injunction “inappropriate,” the analyst firm said. However, “Broadcom would have a potent response that it only decided to license its technology to Verizon because it had certain larger business objectives, which it does not have with its opponent Qualcomm.”