San Diego Based Qualcomm Makes Restructuring Move to Protect Patents

San Diego – The leading cellular phone chipmaker, Qualcomm, has announced its plan to create a subsidiary company in order to protect its patents. In light of increasing cellphone technology patent infringement lawsuits, such as the cases that Samsung and Apple are currently facing, it has been reported that Qualcomm’s move to use two different companies is to avoid similar lawsuits in the future.

The new structure of the organization will include Qualcomm Incorporated, which will consist of Qualcomm Technology Licensing (QTL), Qualcomm’s corporate functions, as well as the majority of its patent portfolio. The newly formed Qualcomm Technologies, Inc. (QTI) will include the semiconductor department, Qualcomm CDMA Technologies (QCT), research and development as well as the product and services division. This transition is said to take effect at the end of the 2013 fiscal year.

Chairman and Chief Executive Paul E. Jacobs stated, “Our internal reorganization will provide even greater protection for our industry-leading intellectual property portfolio as our products and services businesses seek to accelerate innovation and deliver our products to market quickly” and “we are confident that this change to our corporate structure will be accomplished with little to no disruption to employees and customers.”

In a statement released on behalf of the organization the company stated, “QTI and its subsidiaries will have no rights to grant licenses or other rights to patents held by Qualcomm Incorporated. There will be no changes to the intellectual property that is currently owned by Qualcomm Innovation Center, Inc., which works closely with the open source community to accelerate the advancement of the wireless industry as a whole.”

When it comes to patent infringement lawsuits, Qualcomm is no stranger to them. In the past it has been involved in lawsuits with Nokia and Broadcom. In fact, according to a settlement with Broadcom in 2009, Qualcomm is still paying off the millions of dollars. In its settlement to end the patent infringement lawsuit Qualcomm agreed to pay $891 million to Broadcom over a span of four years. The lawsuit was originally filed in 2005.

Qualcomm’s patents are essentially known as the company’s ‘bread and butter’ and so it is understandable as to why the company is willing to go to great lengths in order to protect its intellectual property portfolio.