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Qualcomm Nears Final License Payment to Broadcom

The long-running patent feud over cellphone chips that led to years of litigation between Irvine-based Broadcom Corp. and San Diego rival Qualcomm Corp. is nearing its final chapter.

Qualcomm is set to make its last payment to Broadcom this month, closing the books on an $891 million licensing deal struck four years ago.

The dispute began in 2005 and cost both companies millions as they argued in court and before trade commissions.

Broadcom accused Qualcomm of patent violations and other unfair business practices, including discriminatory licensing, among others.

Qualcomm fired back with multiple appeals and patent suits of its own.

The eventual settlement included the licensing agreement, which has generated some 90% of the $892 million in licensing revenue Broadcom saw from 2009 to 2012, according to the company’s recent annual report.

Broadcom is set to receive about $86 million from Qualcomm this year.

Both companies are leading smartphone chip suppliers and count some of the sectors’ biggest names as customers, including Apple Inc. and Samsung Electronics Co.

Broadcom’s communication chips go in tablets, smartphones, set-top boxes, broadband modems, networking gear and other products, powering Bluetooth, Wi-Fi and receiver applications, among others.

Qualcomm is the market leader in what’s known as baseband chips, essentially the brains of mobile phones. The rivals both turned in strong results last year and entered 2013 set to face off in another emerging market: 5G Wi-Fi chips.

Broadcom moved up one notch to the ninth-largest global chipmaker in 2012 with $7.8 billion in revenue, according to Englewood, Colo.-based market tracker IHS Inc.

Qualcomm moved up three spots to No. 3 with $13.1 billion in sales.

They were among only seven of the top 25 chipmakers that grew sales last year.

Desai Sheds Netlist Seat

H.K. Desai has resigned from the board of Irvine-based networking equipment maker Netlist Inc. “to focus on his increasing demands at QLogic,” the company recently announced.

He spent about a year as a director on Netlist’s audit committee.

Desai is executive chairman of QLogic, a longtime leader in the fibre-channel networking market. QLogic is locked in a battle with Costa Mesa-based rival Emulex Corp. and a bevy of other bigger-name players in the emerging 10-gigabit Ethernet connection market.

Desai spent 15 years as chief executive there before handing over the job to Jeff Benck, who left after about a year and went to rival Emulex as senior vice president and chief operating officer.

Desai then hand-picked another successor, Simon Biddiscombe, who was promoted from chief financial officer to chief executive in 2010. His indication that he’ll spend more time with QLogic comes amid some shifts in the industry.

Emulex recently staved off a proxy battle with its largest shareholder, while QLogic saw a Chicago-based private equity firm up its stake in the company.

Citadel Investment Group, headed by billionaire hedge fund manager Ken Griffin, now owns 5% of QLogic, according to filings with the Securities and Exchange Commission. That’s up from a 3.15% stake at the end of 2012.

Blizzard, Kingston Eye eSports

Two of OC’s biggest tech companies recently boosted their bets on the growing popularity of eSports gaming competitions.

Irvine-based Blizzard Entertainment Inc. acquired technology and assets for the IGN Pro League from San Francisco-based IGN Entertainment Inc.

The company said it plans to use the buy as a cornerstone to create a new unit based in San Francisco that will develop Web and mobile content to support Blizzard games with promotional events, such as tournaments.

IGN’s pro league brand—known to gamers as IPL—will be folded into Blizzard’s operations. The two companies are familiar with one another: IGN has run tournaments for Blizzard’s StarCraft II game in the past.

These tournaments in the past few years have gone from prize purses in the thousands to the millions.

The IGN deal came on the heels of a Blizzard announcement to create a new StarCraft II World Championship Series this year that establishes official global rankings.

Blizzard is the biggest software maker in OC, with $1.6 billion in sales in 2012.

Meanwhile, the Business Journal has confirmed Fountain Valley-based Kingston Technology Inc. has sponsored one of the top StarCraft II teams in South Korea to “increase our brand exposure in Asia,” according to spokesperson David Leong.

Incredible Miracle is the 14th eSports team Kingston has sponsored around the globe.

The designation carries the status of the official memory and solid-state drive sponsor, which means every player has Kingston hardware in his or her PC.

The gaming segment is a growing revenue stream for Kingston and an important branding outlet.

Everyday gamers had a chance to interact with two pro teams Kingston featured at its booth at the PAX East conference in Boston last month.

“It’s a great way to come together and interact, as the gaming community is very dedicated and loyal,” said HyperX marketing manager Annie Leung.

Kingston is the world’s largest memory products maker for computers and consumer electronics, with an estimated $5 billion in annual sales.

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