Qualcomm to pay Broadcom $891M to settle patent disputes

SAN FRANCISCO—Qualcomm Inc. will pay Broadcom Corp. $891 million over four years under the terms of a settlement and multi-year patent agreement announced by the companies Sunday (April 26).

Qualcomm (San Diego) and Broadcom (Irvine, Calif.) have been mired in patent litigation in multiple venues over the past several years. Sunday's agreement will result in the dismissal of all litigation between the companies, including all patent infringement claims in the U.S. International Trade Commission and U.S. District Court in Santa Ana, Calif., as well as the withdrawal by Broadcom of its complaints to the European Commission and the Korea Fair Trade Commission, the companies said.

Under the agreement, the companies have granted certain rights to each other under their respective patent portfolios, the companies said.

Qualcomm said the terms of this agreement would not result in any change to Qualcomm's 3G and 4G licensing revenue model.

The companies have agreed not to assert patents against each other for their respective IC products and certain other products and services, they said. Qualcomm's customers do not receive rights to any of Broadcom's patents with respect to Qualcomm IC products incorporated into non-cellular products and equipment, the companies said.

The settlement includes $200 million to be paid in the quarter ending June 30, Qualcomm said.

"Today's settlement allows both companies to move on with their business and compete in the semiconductor sector as two of its innovation leaders," said Scott McGregor, president and CEO of Broadcom, in a statement."We have set aside our differences while addressing the needs of our customers, our shareholders and the industry."

Qualcomm last week postponed the scheduled release of its fiscal second quarter results, saying that the company had entered into advanced settlement talks with Broadcom. The results are expected to be announced Monday.