Qualcomm Ends IP Feud, Will Pay Broadcom $891M

Qualcomm and Broadcom, two of the primary communications chip firms, agreed today to end their long-standing intellectual property feud, with Qualcomm agreeing to pay out $891 million to Broadcom over four years. Qualcomm (s QCOM), which owns the intellectual property related to the CDMA 3G wireless standard, has been defending itself from patent infringement claims made by Broadcom (s brcm), a key provider of silicon for Wi-Fi, GPS and Ethernet.
Under the terms of the settlement, Qualcomm will pay Broadcom $891 million in cash over a period of four years, of which $200 million will be paid in the quarter ending June 30 of this year. The agreement does not provide for any other scheduled payments between the parties.
It also appears that Broadcom won’t sue Qualcomm’s customers on the cellular side, and Qualcomm won’t sue Broadcom’s customers in the non-cellular world. This is relevant because, in 2007, Verizon (s VZ) ended up agreeing to pay a royalty fee to Broadcom after the International Trade Commission determined that Qualcomm chips used in Verizon phones violated Broadcom’s intellectual property. Under the terms of this deal it looks like Verizon Wireless, as a cellular company, could have avoided paying a double royalty to both chip firms.