Orange County Business Journal

Broadcom Wins Permanent Injunction Against Emulex

Chris Casacchia Monday, March 19, 2012

Irvine-based chipmaker Broadcom Corp. has won a judgment against Emulex Corp. that could end the companies’ long standing legal battle.

The United States District Court for the Central District of California granted Broadcom a permanent injunction against Emulex to prohibit the Costa Mesa-based computer products maker from infringing on a group of its patents.

The March 16 ruling also requires Emulex to pay Broadcom a 9% royalty on products using those patents through June 2013.

The ruling involves products from lines of 10 Gigabit Ethernet controllers, chips and switches--all key technologies integral to Emulex’s core business lines.

The permanent injunction prohibits Emulex from importing, manufacturing, using and selling certain products using these patents in the U.S.

Emulex will be required to pay Broadcom a royalty from sales on products involving the infringed patents during an 18-month sunset period. It's also prohibited from competing for business with products that inlcuded the patented technologies.

The sunset period for one set of patents began on Oct. 12 and ends on April 12, 2013.

The other began on Dec. 16 and runs through June 16, 2013.

The long-running legal feud began in 2009, when the Broadcom charged Emulex with infringing on 10 of its patents for chips related to high-speed networking and data storage technologies.

The original lawsuit was filed in September 2009, a few months after Emulex rebuffed a final $912 million takeover offer from Broadcom.

Broadcom is the biggest chipmaker based in Orange County, with about $7.4 billion in annual revenue.

Emulex is the sixth-largest computer products maker here, with about $450 million in annual revenue.

Its shares are up nearly 1% in afternoon New York trading to a market value of about $895 million.

Broadcom shares are up more than 3% to a market value of about $21.1 billion.