Broadcom Charges Qualcomm with Unfair Competition, Fraud and Breach of Contract

IRVINE, Calif., April 13 /PRNewswire-FirstCall/ -- Broadcom Corporation (Nasdaq: BRCM), a global leader in semiconductors for wired and wireless communications, today announced that it has commenced new litigation against Qualcomm Incorporated (Nasdaq: QCOM) asserting that Qualcomm's conduct before prominent industry standards organizations violates California law.

In a 37-page complaint filed late Thursday in California Superior Court in Orange County, Broadcom asserts that Qualcomm's misconduct before standards setting bodies includes improperly concealing its patents, reneging on licensing obligations, and exerting dominance through hidden affiliations. The complaint alleges that Qualcomm has engaged in a pattern of misconduct across multiple technologies and multiple standards bodies, including those responsible for setting cellular, video, and mobile broadband standards. Broadcom maintains that this misconduct constitutes fraud, breach of contract, and violation of California's unfair competition statute.

San Diego, Calif.-based Qualcomm claims that other industry participants require licenses to its patent portfolio because its patents allegedly cover various telecommunications and other industry standards.

In its complaint, Broadcom cites numerous instances of improper conduct by Qualcomm relating to industry standards bodies, including two recent and public ones: On March 22, the U.S. District Court in San Diego adopted a unanimous jury finding that Qualcomm violated its duty to disclose patents to the international organization that developed the H.264 video compression standard. That court is scheduled to hold a hearing on the proper remedy for Qualcomm's violation on May 2. Separately, in June 2006 the Institute of Electrical and Electronics Engineers (IEEE) suspended its 802.20 standards working group, which had been developing a "4G" wireless communication standard, after an investigation revealed that Qualcomm covertly dominated that group by hiring working group members who did not disclose their affiliations with Qualcomm.

"We now know that Qualcomm has been playing games with industry standards processes for years, leaving both consumers and competitors like Broadcom to pay a heavy price," said David A. Dull, Broadcom's Senior Vice President and General Counsel. "Our goal is to put a stop to this improper behavior and force Qualcomm to play by the same rules that apply to its competitors as well as its own customers."

The relief Broadcom seeks from Qualcomm in the lawsuit includes disgorgement of profits, restitution, compensatory and punitive damages, and a permanent injunction barring Qualcomm from seeking to enforce certain cellular, video, and mobile broadband patents against Broadcom or Broadcom's customers.

Additional Actions

While Qualcomm has either lost or dismissed all of its patent infringement claims against Broadcom, Broadcom continues to pursue various claims against Qualcomm. Last fall, a United States International Trade Commission (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 expected to issue a decision May 8 on the appropriate remedy for Qualcomm's infringement. Beginning May 1, the U.S. District Court in Santa Ana, Calif. is scheduled to try Broadcom's claims that Qualcomm infringes three additional Broadcom patents relating to cellular technology.

Separately, in other actions, Broadcom has joined five other leading 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. Broadcom and other wireless technology companies have filed similar complaints before the Korean Fair Trade Commission.

About Broadcom

Broadcom Corporation is a major technology innovator and global leader in semiconductors for wired and wireless communications. Broadcom products enable the delivery of voice, video, data and multimedia to and throughout the home, the office and the mobile environment. We provide the industry's broadest portfolio of state-of-the-art, system-on-a-chip and software solutions to manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices. These solutions support our core mission: Connecting everything(R).

Broadcom is one of the world's largest fabless semiconductor companies, with 2006 revenue of $3.67 billion, and holds over 2,000 U.S. and 800 foreign patents, more than 6,000 additional pending patent applications, and one of the broadest intellectual property portfolios addressing both wired and wireless transmission of voice, video and data.

Broadcom is headquartered in Irvine, Calif., and has offices and research facilities in North America, Asia and Europe. Broadcom may be contacted at +1.949.926.5900 or at www.broadcom.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

All statements included or incorporated by reference in this release, other than statements or characterizations of historical fact, are forward- looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry and business, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.

Important factors that may cause such a difference for Broadcom include, but are not limited to, our ability to prevail in the various federal and state lawsuits against Qualcomm; our ability to secure an appropriate remedy in the U.S. International Trade Commission proceeding against Qualcomm; the ability of our patents to protect our intellectual property and products; our ability to enforce our intellectual property rights; and the risks associated with litigation in general, including the costs and time that must be devoted to litigation, the potential diversion of management's attention that may result from being engaged in litigation, and the possibility of adverse results.

Our Annual Report on Form 10-K, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition. The forward-looking statements in this release speak only as of this date. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.

Broadcom(R), the pulse logo, Connecting everything(R) and the Connecting everything logo are among the trademarks of Broadcom Corporation and/or its affiliates in the United States, certain other countries and/or the EU. Any trademarks or trade names mentioned are the property of their respective owners.

    Broadcom Business Press Contact
    Bill Blanning
    Vice President, Global Media Relations
    949-926-5555
    blanning@broadcom.com

    Broadcom Investor Relations Contact
    T. Peter Andrew
    Vice President, Corporate Communications
    949-926-5663
    andrewtp@broadcom.com

SOURCE Broadcom Corporation; BRCM Corporate

Contacts

Business Press: Bill Blanning
Vice President
Global Media Relations
Broadcom
+1-949-926-5555
blanning@broadcom.com

Investors: T. Peter Andrew
Vice President
Corporate Communications
Broadcom
+1-949-926-5663
andrewtp@broadcom.com