Qualcomm, Broadcom end chip shop spat

US chip giants Qualcomm and Broadcom have finally buried the hatchet over their long standing patent dispute, granting each other rights to their respective patent portfolios.

The agreement, struck on Sunday, will see all litigation between the two companies dropped, including all patent infringement claims being heard by the International Trade Commission and the European Commission.

As part of the deal, Qualcomm will pay Broadcom a total of $891m over a four year period, with $200m to be paid in the second quarter of this year. The two firms will no longer assert patents against each other regarding their respective integrated circuit products, nor will the companies customers receive any rights to the respective patents owned by the other firm.

In June of 2007, the ITC banned the import of new 3G phone models using chips made by Qualcomm. The ban came into effect after Qualcomm was previously found guilty of infringing three Broadcom patents related to a battery saving feature in cellular baseband chips.

“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. “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.”