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Texas Instruments claims win in Qualcomm dispute

The Texas chipmaker says that it will likely be allowed to continue manufacturing products that rely on Qualcomm patents.

Texas Instruments is reporting that it has won the latest round in its intellectual-property battle against Qualcomm, which sought to end a cross-licensing agreement between the two companies.

The companies, which both make chips for cell phones, have a 3-year-old patent-licensing agreement that gives Texas Instruments access to Qualcomm's patents for Code Division Multiple Access (CDMA) technology. In exchange, the Texas company gave Qualcomm access to some of its transistor technology patents.

Initially, Qualcomm sued Texas Instruments for allegedly making public disclosures about the agreement in violation of a confidentiality clause. Qualcomm won't detail what its rival is alleged to have disclosed. In response, Texas Instruments sued Qualcomm, alleging that the company offered discounts to handset makers in violation of their agreement. The lawsuits were subsequently combined in Delaware, where Texas Instruments originally filed its claim.

On Thursday, Texas Instruments representatives said that the Delaware Court of Chancery will soon issue its ruling in the case. Representatives of Dallas-based Texas Instruments said the Delaware court has found that it did not violate disclosure guidelines that were part of the licensing pact, as Qualcomm contended. The two companies finished presenting testimony in the case Wednesday.

Qualcomm responded to Texas Instruments' announcement with a written statement that noted the court may still fine its rival for its business practices, even though the court upheld the licensing agreement. In the statement, Qualcomm executives said they were "gratified" with the proceedings and repeatedly pointed out the company's view that the courts had found Texas Instruments in breach of the pact, not Qualcomm.

If the court rules as Texas Instruments has indicated, the company believes it would not be forced to stop manufacturing products covered under the agreement. Qualcomm had sought to dissolve the pact based on its claim of disclosure issues. At stake is the right of each company to "develop a semiconductor that infringed" on the other's patents and sell it without being sued.

Texas Instruments conceded that the court plans to dismiss its own charge that Qualcomm tendered discounts to handset makers. The suit does not name which handset makers were offered discounts, but many of the world's major phone manufacturers have licensed Qualcomm's CDMA cell phone technology.

Representatives of Texas Instruments declined to comment on the disclosure charges levied against it by Qualcomm, but said the details of the disputed activity would be made public in court filings scheduled to be released later this month.

The court is expected to consider Qualcomm's original claims for damages at a trial scheduled to begin on Aug. 16.