Qualcomm 2014 Annual Report Download - page 30

Item 3. Legal Proceedings
ParkerVision, Inc. v. QUALCOMM Incorporated : On July 20, 2011, ParkerVision filed a complaint against us in the United States District
Court for the Middle District of Florida alleging that certain of our products infringe seven of its patents alleged to cover direct down-
conversion
receivers. ParkerVision’s complaint sought damages and injunctive and other relief. Subsequently, ParkerVision narrowed its allegations to
assert only four patents. On October 17, 2013, the jury returned a verdict finding all asserted claims of the four at-issue patents to be infringed
and finding that none of the asserted claims are invalid. On October 24, 2013, the jury returned a separate verdict assessing total past damages of
approximately $173 million
and finding that our infringement was not willful. We recorded the verdict amount in fiscal 2013 as a charge in other
expenses. Post-verdict motions, including our motions for judgment as a matter of law and a new trial on invalidity and non-infringement and
ParkerVision’s motions for injunctive relief and ongoing royalties, were filed by January 24, 2014. A hearing on these motions was held on May
1, 2014. On June 20, 2014, the court granted our motion to overturn the infringement verdict, denied our motion to overturn the invalidity
verdict, and denied the remaining motions as moot. The court then entered judgment in our favor. As a result of the court’s judgment, we are not
liable for any damages to ParkerVision, and therefore, we reversed all recorded amounts related to the damages verdict in fiscal 2014. On June
25, 2014, ParkerVision filed a notice of appeal with the court. On May 1, 2014, ParkerVision filed another complaint against us in the United
States District Court for the Middle District of Florida alleging patent infringement. On August 21, 2014, ParkerVision amended the complaint,
now captioned ParkerVision, Inc. v. QUALCOMM Incorporated, Qualcomm Atheros, Inc., HTC Corporation, HTC America, Inc., Samsung
Electronics Co., LTD., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC,
broadening the allegations.
ParkerVision now alleges that we infringe 11 additional patents and seeks damages and injunctive and other relief. We were served with the
complaint in this second action on August 28, 2014 and have not yet responded.
Nvidia Corporation v. Qualcomm Incorporated : On September 4, 2014, Nvidia filed a complaint in the United States District Court for the
District of Delaware and also with the United States International Trade Commission (ITC) pursuant to Section 337 of the Tariff Act of 1930
against us, Samsung Electronics Co., Ltd., and other Samsung entities, alleging infringement of seven patents related to graphics processing. In
the ITC complaint, Nvidia seeks an exclusion order barring the importation of our consumer electronics and display device products that
infringe, induce infringement and/or contribute to the infringement of at least one of the seven asserted graphics processing patents as well as a
cease and desist order preventing us from carrying out commercial activities within the United States related to such products. In the District of
Delaware complaint, Nvidia is seeking an award of damages for the infringement of the asserted patents, a finding that such infringement is
willful and treble damages for such willful infringement, and an order permanently enjoining us from infringing the asserted patents. The ITC
instituted an investigation into Nvidia’s allegations on October 6, 2014. The evidentiary hearing for the investigation is set for June 8 to June 15,
2015. The Initial Determination of the Administrative Law Judge is due October 9, 2015, and the target date for completion of the investigation
by the Commission is set for February 10, 2016. The district court case was stayed on October 23, 2014 pending completion of the ITC
investigation including appeals.
Icera Complaint to the European Commission (Commission) : On June 7, 2010, the Commission notified and provided us with a redacted
copy of a complaint filed with the Commission by Icera, Inc. (subsequently acquired by Nvidia Corporation) alleging that we had engaged in
anticompetitive activity. We were asked by the Commission to submit a preliminary response to the portions of the complaint disclosed to us,
and we submitted our response in July 2010. Subsequently, we have provided and continue to provide additional documents and information as
requested by the Commission. We continue to cooperate fully with the Commission’s preliminary investigation.
European Commission Investigation : On October 15, 2014, the Commission notified us that it is conducting an investigation of us relating
to Article 101 and/or 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 and/or 54 of the Agreement for the
European Economic Area (EEA Agreement). We understand that the investigation concerns primarily the sale and/or marketing of our baseband
chipsets, including alleged conditions relating to the provision by us of rebates and/or other financial incentives. If a violation is found, a broad
range of remedies is potentially available to the Commission, including imposing a fine and/or injunctive relief prohibiting or restricting certain
business practices. Given that this investigation is in its early stages, it is difficult to predict the outcome or what remedies, if any, may be
imposed by the Commission. We continue to cooperate with the Commission as it conducts its investigation.
Korea Fair Trade Commission (KFTC) Complaint : On January 4, 2010, the KFTC issued a written decision finding that we had violated
South Korean law by offering certain discounts and rebates for purchases of our CDMA chips and for including in certain agreements language
requiring the continued payment of royalties after all licensed patents have expired. The KFTC levied a fine, which we paid and recorded as an
expense in fiscal 2010. We appealed to the Seoul High Court, and on June 19, 2013, the Seoul High Court affirmed the KFTC’s decision. On
July 4, 2013, we filed an appeal with the Korea Supreme Court. There have been no material developments with respect to this matter.
Japan Fair Trade Commission (JFTC) Complaint : The JFTC received unspecified complaints alleging that our business practices are, in
some way, a violation of Japanese law. On September 29, 2009, the JFTC issued a cease and desist order concluding that our Japanese licensees
were forced to cross-license patents to us on a royalty-free basis and were forced
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