Qualcomm and Broadcom settle patent spat

Wireless specialist Qualcomm takes $891m hit over four years

Qualcomm has settled its patent dispute with Broadcom

Chip makers Qualcomm and Broadcom have finally resolved a patent dispute spanning four years and three continents, with Qualcomm agreeing to pay $891m (£611m) in cash to its rival.

Under the terms of the deal, Qualcomm will pay the amount over a period of four years. The first payment of $200m (£137m) is due by the end of June.

In return, all litigation, including patent infringement claims and Broadcom's complaints to the European Commission and the Korea Fair Trade Commission, will be withdrawn. Other terms of the agreement remain confidential.

"We believe that this resolution is positive for both Qualcomm and Broadcom, our customers, our partners and the overall industry," said Paul Jacobs, chairman and chief executive of Qualcomm.

"The settlement will allow us to direct our full attention and resources to continuing to innovate, improving our competitive position in this economic downturn and growing demand for wireless products and services."

Qualcomm has been in and out of the courtroom in several long-running legal disputes in recent years, having finally settled a feud with Nokia in July last year.

Analysts believe that, with the current economic downturn taking its toll on all markets, the move was designed to bring an end to the spiralling costs of continued litigation.

"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 of Broadcom.

"We have set aside our differences while addressing the needs of our customers, our shareholders and the industry. In addition, the companies have worked together to achieve their mutual goals of improving the competitive dynamics of the industry."