Qualcomm Inc. and Sweden's Ericsson Inc. announced today an agreement to end their bitter patent dispute over CDMA technology, and also announced that, as part of the agreement, Ericsson will acquire Qualcomm's wireless infrastructure business for an undisclosed price.
Under the terms of the agreement, Ericsson will purchase Qualcomm's Wireless Infrastructure Division, which develops and sells base stations and other equipment based on Qualcomm's CDMA technology. Ericsson will also assume control of Qualcomm's R&D centers in San Diego and Boulder, Colo. Approximately 1,000 employees from Qualcomm's infrastructure operations will become part of Ericsson in the process. That will leave San Diego-based Qualcomm with about 8,500 employees.
Qualcomm, which denied that the deal is part of a plan to bail out of the handset or other hardware businesses, also reached an out-of-court settlement with Ericsson, ostensibly paving the way for a global wireless standard in the third-generation (3G) digital-cellular market. In recent years, the two companies have been trading patent infringement suits in regard to CDMA technology.
The out-of-court settlement calls for Ericsson to gain access to Qualcomm's CDMA patents, enabling the Swedish company to produce handsets and other products based on Qualcomm's CDMA technology. In return, Qualcomm will gain access to some of Ericsson's patents for GSM technology, the world's largest digital-cellular standard and the chief rival of CDMA.
At the same time, Ericsson and Qualcomm have agreed to jointly support a single 3G standard based on CDMA technology. At present, Ericsson is developing a 3G technology called W-CDMA, while Qualcomm has a competing protocol, cdma2000.
``With the resolution of 3G and the cross-licensing of our patents, Qualcomm and Ericsson have paved the way for the expansion of global CDMA-based wireless communications,'' said Irwin Jacobs, Qualcomm's chairman and chief executive, in a statement.