On a day when the markets fell sharply, shares of Broadcom Corp. gained after an analyst said a recent International Trade Commission staff attorney’s brief appeared favorable to the chipmaker.
Alex Guana, an analyst with UBS Warburg, said a staff member filed an argument that said San Diego-based Qualcomm Inc., which licenses chip and software for wireless phones, infringed on two patents by Irvine-based Broadcom, a communications chipmaker.
“This staff report must move on to a judge and penalty phases before injunctions against (Qualcomm) products could occur,” Guana wrote.
That could take until February 2007.
Qualcomm fired off a press release in the wake of the UBS report. It said the staffers report had been misunderstood by analysts who are following the patent dispute.
“No initial decision has been made,” Qualcomm said in a statement. “Instead, the brief sets forth the views of the staff attorney, who has no decision-making authority, following the first phase of the hearing.”
Broadcom and Qualcomm have been in a long-running dispute over chip patents. A decision in favor of Broadcom could help the company expand its market share in the fast-growing handset market.
The commission attorney also wrote that three Broadcom patents were valid.
“We believe this development substantially improves its ability to get already secured design wins moving in the market, and advance new design win efforts that may have otherwise have been stalled owing to IP (intellectual property) and litigation concerns with end market customers,” Guana said.
Broadcom’s stock climbed nearly 3% Wednesday as the markets saw heavy selling on inflation concerns. Nasdaq lost 1.5% to close at 2,196.
