Nikkei Electronics Asia -- August 2009
Reports
'We Need to Change the Patent System'---Scott McGregor, CEO of Broadcom

In April 2009, Broadcom Corp of the US settled out of court with Qualcomm Inc of the US for a patent infringement case that has been under way for four years in the US, Europe and elsewhere. We spoke to Scott McGregor, president and chief executive officer (CEO) of Broadcom, about what the settlement means for the firm boasting the top share in the communications integrated circuit (IC) market for Bluetooth, Wireless Local Area network (LAN), etc, and his plans for the future.

You finally reached a settlement with Qualcomm. Can you explain why a settlement was reached at this point in time?

Continuing the battle would just cost us both massive legal fees, and it seemed more important to invest that capital into innovation to make better products to provide to our customers, I think. We reached this settlement through compromise, ensuring that neither company loses competitiveness because of it. 

We're reasonably happy with the result, and I think Qualcomm is as well. We very clearly defined what intellectual resources we can each use. We won't be having any more lawsuits about intellectual property rights. I think it is excellent for the wireless communications industry overall that any doubt about the future has been dispelled.

After this long legal battle, what do you expect the relationship between the two companies to be like?

We remain competitors, of course. No change there. I think that we will be able to act cooperatively in the future, though. 

In the past Broadcom was involved in an intellectual property infringement dispute with Intel Corp of the US (Note 1). Today we work closely with Intel to help empower the Wireless LAN community, sharing opinions and helping that community draw up standards. Even competitors can cooperate with each other in their common interest. The same sort of thing may occur between Broadcom and Qualcomm. 

We are business rivals, but Qualcomm's CEO Paul Jacobs and I respect each other, and have a very good relationship. After we signed off on this settlement, we had dinner together. And I think he enjoyed it as much as I did.

For Wireless LAN, a few patent holders demand enormous licensing fees, and there has been a flurry of patent infringement suits involving equipment manufacturers who refuse to pay up.

It is highly unfortunate for the industry that these "patent trolls" have appeared. We all have to work to prevent them from complicating the situation in the industry.

The problem is more fundamental, though: the patent system no longer matches the requirements of the time. That's why we are lobbying Congress, the Senate, etc, to revise them. The patent system needs to be changed.

What problems do you see with the current patent system?

The patent system functioned very well in the past, for example, when fasteners or the like were invented, because only a few patents were involved in any product. Advanced products like a mobile phone, however, are collections of millions of patents, and it is impossible to manufacture the phone even if only a tiny portion of that volume of patents cannot be licensed. All patents are treated equally, with no evaluation of whether that patent is a crucial one or not.

MOST POPULAR ARTICLES

24 Hours | 7 Days