Irvine-based chipmaker Broadcom Corp. and San Diego rival Qualcomm Inc. have struck a deal to end more than three years of legal sparring over cell phone chips with Qualcomm paying Broadcom $891 million over four years.
The companies announced the settlement late Sunday. As part of the deal, both companies are dropping litigation and trade complaints against each other.
Qualcomm, which has lost several key legal battles with Broadcom, plans to make its first $200 million payment to Broadcom in the current quarter.
Charter Equity Research analyst Ed Snyder told Reuters the deal was a “win for Broadcom.”
“It’s clearly costing Qualcomm a lot but it’s best for both companies to move on,” he said.
Last week, Qualcomm delayed its quarterly results because of advanced settlement talks with Broadcom.
In the past two years there have been a handful of false starts about a possible settlement that resulted in either Broadcom or Qualcomm shooting down the talk as rumors.
Broadcom and Qualcomm have been fighting in court and before trade commissions since 2005.
Beyond patent violations, Broadcom accused Qualcomm of unfair business practices, discriminatory licensing and violation of industry standards by concealing its patents.
Qualcomm has fired back with multiple appeals and patent suits of its own.
Behind the dispute is Broadcom’s bid to win more business supplying chips to makers of cell phones.
Right now, it’s a small cell phone chip player behind Qualcomm and Texas Instruments Inc.
