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Broadcom GPS Patent Victory Poses Questions for Sirf

Irvine chipmaker Broadcom Corp.’s latest patent victory may prove to be a nail in the coffin for San Jose-based Sirf Technology Holdings Inc.

A few weeks ago, an International Trade Commission judge ruled that Sirf infringed on six of Broadcom’s patents for global positioning in cell phones.

It was a slap to Sirf, which just a few months ago raised a separate ITC complaint against Broadcom alleging patent infringement. Sirf lost after a different ITC judge rejected its complaint.

The company, which has seen shares fall 85% in the past year with a recent market value of $140 million, could have to cough up a lot of money for fines or a licensing deal, if it chooses to settle with Broadcom.

A final decision is set to be made by a six-person panel before the end of the year.

That’s just the latest in a string of bad news for Sirf, which saw its shares slump nearly 30% after Broadcom’s win.

The company ousted its chief executive and chief financial officer in April.

Some industry analysts say the ITC decision further marginalizes Sirf.

“It marks the end of any reason to care about a company that once seemed poised to be a central player in a new world of iPhone-like gadgets,” said industry analyst Alexei Oreskovic in a report on finance Web site TheStreet.com. “Sirf’s decision to push forward with the patent litigation now looks foolish, if not downright reckless.”

Broadcom said it’s looking to reach “a mutually acceptable resolution of these disputes.”

It’s likely to have the upper hand at the bargaining table, according to Oreskovic.

Sirf was one of the original developers of GPS chips, which send and receive signals from satellites that pinpoint locations and help with search functions and driving directions.

Although Sirf goes after cell phone makers as customers, most of its chips go into handheld GPS devices and ones made for autos.

Sirf saw sales of about $330 million last year.

There are a lot of other chipmakers getting into the GPS market for cell phones and

smart phones, including Broadcom, Texas Instruments Inc. and Infineon Technologies

AG.

Last year, Broadcom paid $226 million for San Jose’s Global Locate Inc., a privately held maker of GPS chips.

Other recent deals: Irvine startup u-Nav Microelectronics Inc. was bought by Santa Clara-based Atheros Communications Inc. for $54 million. Newport Beach’s GloNav Inc. was bought by NXP Semiconductors, the former chip arm of Royal Philips Electronics NV, for $85 million.


Ingram’s Green Screen

Santa Ana’s Ingram Micro Inc., the biggest distributor of technology goods, software and consumer electronics, launched a service to help its reseller customers go green.

Ingram partnered with the Green Electronics Council, a Portland, Ore.-based nonprofit, to use a software system that rates electronics by how friendly they are to the environment.

The software, dubbed the “electronic product environmental assessment tool,” evaluates

computers, laptops and monitors by some 50

criteria.

It’s a hit with Ingram’s customers that sell to the federal government, according to Bob Laclede, general manager for government sales.


MegaPath Deal

Costa Mesa technology services outsourcing company MegaPath Inc. quietly purchased the assets of a small competitor.

Privately held MegaPath bought Atlanta-based IP Merchant Solutions Inc. for an undisclosed amount.

The company already has been folded into MegaPath’s operations.

MegaPath is what’s known as a “managed service provider.” It mainly helps companies set up wide-area networks that connect computers at multiple offices. It also manages phone services and network security for businesses.

Retailers call on MegaPath to network various stores and offices.

MegaPath bought IP Merchant Solutions for its technology that connects retail stores to credit card processors.

“It’s a combination of hardware and circuits connecting our network to the various credit card processors,” said Gregory Davis, vice president of product marketing for MegaPath.

Credit card processors act as an electronic clearing house between two banks (the customer’s and the retailer’s).

Typically, retailers have to set up networks with processors for each type of card they accept: Visa, American Express, gift cards and any others. They would get one-stop shopping with MegaPath.

The company, which doesn’t disclose sales, has some 30 workers at its local headquarters and about 450 workers in all.


Clarification

In my column a few weeks ago, I incorrectly said Irvine’s Mavent Inc.’s software takes a customer’s credit information to do instant compliance audits for mortgage loans.

To clarify, the software looks at a customer’s existing loan history to determine whether a loan complies with government laws related to mortgage lending.

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