Broadcom Corp.’s stock sagged 3% Tuesday on an analyst’s downgrade,but the chipmaker said it received better news on its court battle with rival Qualcomm Inc. over intellectual property.
Shaw Wu, an analyst with American Technology Research Inc., lowered Irvine-based Broadcom from “neutral” to “sell.”
The analyst was concerned sales could be soft in the current quarter and into early next year as inventories build up across the industry, according to the note.
Wu said the downgrade was not connected with legal proceedings involving Broadcom and San Diego-based Qualcomm.
Broadcom said late Monday a U.S. District Court Judge in San Diego denied Qualcomm’s motion to suspend Broadcom’s third-generation cellular chip business.
Qualcomm also withdrew its allegations against Broadcom of software theft, according to Broadcom. As a compromise, Broadcom and Qualcomm are to agree on a set of documents to be quarantined pending the outcome of the case.
Broadcom said it has not misused any trade secrets, and such a quarantine will have no effect on its business.
However, Qualcomm said Tuesday that the judge had approved the preliminary injuction that it had requested. A hearing on the matter would come Oct. 27 so “that the scope of an appropriate injunction could be determined,” according to Qualcomm.
Trial for the case is set for October 2007.
In a separate case in the same court, Broadcom said it has filed a motion for summary judgment aimed to stop what it said was Qualcomm’s effort to extract multiple patent royalties for the same products and patents.
The company also said it had appealed last month’s dismissal of its federal antitrust lawsuit against Qualcomm by a federal judge in New Jersey.
