No one would accuse Broadcom Corp. of schadenfreude. But the Irvine-based chipmaker could stand to benefit from a patent infringement lawsuit filed last month by an arm of the University of Washington against a trio of electronics makers.
At issue is Bluetooth wireless technology developed on the U-Dub campus in Seattle. The Washington Research Foundation, which pushes technology developed at the school for commercial use, claims Matsushita Electric Industrial Co.,more widely known as Panasonic,Nokia Corp. and Samsung Electronics Co. used unlicensed Bluetooth chips in computer products and mobile phones.
The keyword: unlicensed.
Broadcom is big in Bluetooth chips, but it licenses the technology.
The companies being sued imported Bluetooth chips to the U.S.
Cambridge Silicon Radio PLC, an English rival to Broadcom that sold unlicensed Bluetooth chips to the electronics companies, isn’t named in the suit. U-Dub’s U.S. patent isn’t enforceable against the company, according to a Reuters report.
“Each of the defendants has an option to avoid infringement of the subject patents and applications by purchasing Bluetooth chipsets from Broadcom,” the lawsuit states.
Broadcom hasn’t commented on the lawsuit or its impact on sales.
Rob Enderle, principal of the San Jose-based technology tracker Enderle Group, said the suit could be a boon.
“Broadcom has licensed the technology, so that makes their chipset the safe chipset,” he said.
“Anybody using Broadcom chipsets is safe from any legal attack. The fact they actually have the license gives them the leg up in an environment that is very sensitive to (intellectual property) litigation.”
Cathay Financial Inc. analyst Suji De Silva isn’t convinced.
“Customers are much more concerned about unit costs,” he said. “I think vendors can comfort customers that if they need the license they’ll get it. I think it will go back to old fashioned competition on performance and price.”
The suit filed in U.S. district court in Seattle seeks unspecified damages and an order barring the companies from selling unlicensed Bluetooth products in the U.S.
Done Deal
Broadcom has closed its $62 million buy of network software maker LVL7 Systems Inc. The company is acquiring privately held LVL7’s shares and vested stock options as well as paying off debt.
The deal was announced in late November. LVL7, based in Morrisville, N.C., already had been working with Broadcom on its networking chips.
Broadcom could see a write-off for research and development expenses related to the acquisition in the current quarter. The amount of that charge has not been determined.
Chip Sales, Forecast
This past holiday season was dubbed the digital Christmas, and there was a windfall in November chip sales to support the claim.
The San Jose-based Semiconductor Industry Association reported global chip sales climbed more than 11% in November from a year earlier to $22.7 billion. November was the fifth consecutive month of record sales, the association said.
“Despite some signs of slower economic growth in the fourth quarter, consumer purchases of electronic products remained strong and again drove semiconductor sales to record levels,” said George Scalise, president of the chip trade group.
There are concerns about this year and beyond. The association recently lowered its chip forecast for 2007 and the two years after that. Factors include slower economic growth around the world, stagnant capital spending and lackluster demand in the PC and wireless markets.
Ingram Changes
Santa Ana-based Ingram Micro Inc. has reworked its management, sales and operations dealing with makers of technology products.
Ingram, the largest distributor of technology products, has combined North American vendor management and sales teams under Senior Vice President Brian Wiser. Operations and purchasing have been brought under Senior Vice President Terry Tysseland.
Chief Financial Officer Ross Crane is heading a strategic initiatives group.
The moves create “increased opportunities for associates in North America and includes strategic managerial realignment that puts leaders in roles that best utilize their experience and skills,” said Keith Bradley, president of Ingram’s North American operations.
Wiser started with Ingram Micro sales in 1986 and has run the vendor marketing group for the past year.
Tysseland brings together the distribution and purchasing teams and is expected to improve inventory management.
Crane, financial chief since 2005, will continue to oversee the North American financial team and add the newly created strategic initiatives team to develop special projects.
“Our quicker and more nimble organization assures that Ingram Micro will continue as an indispensable business partner and a valued bridge between our vendors and customers,” Bradley said.
