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TI denies breaking Qualcomm deal

Texas Instruments on Monday rejected claims, made in a lawsuit filed by Qualcomm, that it breached a patent-licensing agreement between the two companies.

Texas Instruments on Monday denied claims made in a lawsuit filed by Qualcomm that it breached a patent-licensing agreement between the two companies.

"We have reviewed the complaint against TI and feel it is without merit," Joseph F. Hubach, a TI senior vice president, said of the suit, which Qualcomm filed on Friday in Newcastle County, Del., Superior Court. "We will contest it vigorously."

The two companies, which both make chips for cell phones, have a two-year-old patent-licensing agreement that gives TI 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.

On Friday, Qualcomm sued TI for making public disclosures about the agreement in violation of a confidentiality clause. Qualcomm won't detail what TI is alleged to have disclosed. A Qualcomm representative had no comment Monday. Deutsche Bank analysts wrote in a note to clients on Monday that TI allegedly disclosed it wasn't paying Qualcomm any royalties.

Hubach believes the suit may be an attempt by Qualcomm to delay TI from entering the CDMA chip market. But the Dallas-based company still plans to sell CDMA chips to a broader market, starting in the next few weeks, he said.

"Qualcomm has enjoyed many years of selling...against little or no competition," Hubach said in the statement. "TI intends to establish this market as a level playing field, in which open competition prevails and consumers benefit."

Deutsche Bank analysts agreed. "We believe that the spirit of Qualcomm's lawsuit is to use (TI)'s alleged contract infraction as an opportunity to bar, or at least delay, the company from competing in a CDMA market that Qualcomm has kept a tight noose on since it first pioneered the technology," the analysts wrote.