Sometimes it takes new blood to resolve an old fight. Chipmakers Qualcomm and Broadcom just announced a settlement of their years-long patent fight. The two men who hammered out the final deal were relatively late to the party: Qualcomm GC Don Rosenberg joined his company in 2007 and Broadcom GC Arthur Chong joined this past November.
The two previous GCs were casualties of the dispute, which stretches back to 2005 and involved numerous claims and counterclaims. Qualcomm and its lawyers at Day Casebeer and the firm formerly known as Heller Ehrman were sanctioned for discovery violations and the failed, overly aggressive litigation strategy led directly to Qualcomm GC Louis Lupin’s resignation. Corporate Counsel’s Alan Cohne took the opportunity to use Qualcomm’s debacle as an object lesson in how not to manage a case.
After the jump, lots and lots of BigLaw involvement, and Rosenberg may already be putting his foot in it.
The first salvo was fired by Broadcom, when it sued Qualcomm for infringement and antitrust violations in three separate actions. Bill Lee (Harvard AB ‘72, Cornell JD, MBA ‘76), co-managing partner at WilmerHale, took the lead on those cases. Then the floodgates opened for the BigLaw extravaganza.
As we said above, Qualcomm used, to its detriment, Day Casebeer and Heller Ehrman for the original matters. The company then retained DLA Piper, but pretty quickly dumped them for Cravath’s presiding partner Evan Chesler (NYU AB ‘70, Hunter MA ‘73, NYU JD ‘75). Rosenberg and Chesler know each other very well from countless cases when Rosenberg was at IBM, including SCO v. IBM and IBM v. Microsoft. While Cravath was handling the litigation, Cooley Godward’s Erich Reifschneider (MIT BS x2 ‘89, Harvard JD ‘92) was representing Qualcomm in settlement negotiations with Wilson Sonsini’s Adit Khorana (Purdue BS, Stanford JD) and Michael Murphy (Stanford BS ‘89, JD ‘93) on the Broadcom side.
The settlement basically consists of Qualcomm paying $891 million over four years and the parties entering into a patent cross license. But Rosenberg might have tipped his hand:
Rosenberg told Reuters, for instance, that even if Qualcomm does not assert patents against Broadcom, it can still collect royalties from cell phone companies that use Broadcom’s chips.
But some legal observers say that might not be so easy, given recent decisions that limit so-called downstream licensing.
“His comment that ‘Well, we can’t get after Broadcom, but we can go after their customers,’ I don’t know about that,” said Ronald Laurie, of IP consulting firm Inflexion Point Strategies. “It’s less certain than it used to be.”
Presumably, he’s talking about the doctrine of first sale, or the exhaustion doctrine, which is supposed to prevent exactly that behavior (licensing a manufacturer then suing downstream purchasers).
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