No USTR Veto On ITC Ruling On Broadcom-Qualcomm Dispute

WASHINGTON -(Dow Jones)- President George W. Bush failed to veto on Monday a ruling by the U.S. International Trade Commission that places an immediate ban on the import of many cellular phones into the USA using microchips designed by Qualcomm.

The decision by Susan Schwab, the U.S. Trade Representative, released in a statement, means that an import ban on the cellular phones goes into effect on Tuesday.

"I have decided to permit the limited exclusion order and cease and desist order that the USITC issued in its investigation," said Schwab in the statement.

Qualcomm is likely to seek an immediate stay from the ITC ruling at the Federal District Court, which would put the import ban on hold pending an appeal in the case.

An earlier attempt by the company to seek such a hold was rejected by the court which said it didn't have jurisdiction in the matter until the USTR made up its mind on a veto.

The decision is a major benchmark in the ongoing legal battle between Qualcomm and rival Broadcom Corp.. Broadcom scored a legal victory when the ITC ruled that Qualcomm had illegally used its technology in its chipsets.

The ban was opposed by wireless carriers, which argued that it would deprive public safety officials of necessary communications equipment and harm the wireless industry.

It would restrict new models of phones carrying Qualcomm chipsets - mostly phones that run on the evolution-data optimized, or EV-DO, standard - from coming into the U.S.

It exempts models of phones that were set for import before June 7, the date the ITC handed down the penalty. But any new models of phones would be impacted by the ban.

Among the carriers, Sprint Nextel will be hurt the most by the ban. Verizon Wireless would have been affected, too, but it cut a deal with Broadcom last month to ensure its phones can continue to be imported.

AT&T and T-Mobile, a unit of Germany's Deutsche Telekom, are less reliant on 3G phones and so wouldn't be affected as much.

Apple's is a 2G phone and wouldn't be affected by the ban.

In addition to wireless carriers, handset makers like LG Electronics and Samsung Electronics, which face bans on their most expensive and profitable phones.

-By Corey Boles, Dow Jones Newswires; 202-862-6637; corey.boles@dowjones.com

-By Roger Cheng, Dow Jones Newswiers; 212-938-2020; roger.cheng@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 6th August 2007