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Qualcomm gets good news
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July 17, 2000: 4:29 p.m. ET
Company's shares rise as three patents are upheld in Japan and in Europe
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NEW YORK (CNNfn) - The stock of mobile phone chipset maker Qualcomm Inc. jumped about 11 percent Monday after patent officials in Japan and Europe upheld the validity of three of the company's technology patents.
Qualcomm (QCOM: Research, Estimates) stock jumped 6-13/16 to 69-7/8, a 10.8 percent gain, in late afternoon trading Monday.
Last year, six companies - including Nokia, Ericsson and NTT - tried to challenge the validity of one of Qualcomm's key patents in Japan. In a press release issued before the open Monday, Qualcomm said that the Japanese Patent Office rejected the claims made by those six companies and upheld Qualcomm's claim.
In separate actions, the European Patent Office upheld the validity of two other Qualcomm patents.
Qualcomm makes mobile phone chipsets based on Code Division Multiple Access, or CDMA, technology and also licenses that technology to other makers of mobile phones. The CDMA standard competes with one called Time Division Multiple Access, or variations of TDMA known as Global System for Mobile Communications, or GSM. CDMA is the standard in the United States and Korea, but GSM is commonly used in other Asian countries and Europe.
In its news release, Qualcomm said that the patent upheld in Japan is "essential to all viable commercial CDMA standards, including the two third-generation (3G) standards, known as W-CDMA and cdma2000, to be deployed in Japan."
The inventions covered by one of the European patents enable enhanced coverage and increased capacity in communications systems, especially indoor CDMA systems. The second patent covers an audible feedback feature that gives the user the ability to monitor the progress of a fax or modem connection over a digital channel.
"We are pleased that the Japanese Patent Office and the European Patent Office have upheld the validity of these important patents," said Ben Miller, vice president and chief patent strategist for Qualcomm, in a news release. "The confirmation of these inventions strengthens our patent portfolio in Japan and Europe and emphasizes the international value of the many licenses granted by Qualcomm."
Separately, Qualcomm said Monday that Japanese electronics giant Toshiba had agreed to expand its licensing agreement with Qualcomm to include all modes of the "third generation" CDMA standard, including cdma2000 and W-CDMA.
Analog mobile phone systems are considered first generation, while digital systems are second generation. The third generation, or 3G as it is commonly called, will combine digital voice signals with data speeds in excess of 100 kilobits per second, versus 14.4 kilobits per second under current technology. 3G service will begin to be offered in Korea later this year, although it is not expected to reach the United States until 2001.
Qualcomm already has licensed 3G technology to more than a dozen of its CDMA licensees, and it hopes to convert the remainder over the next 12-to-24 months.
On July 13, Verizon Wireless (VZ: Research, Estimates) and Lucent Technologies (LU: Research, Estimates) said they had made the first high-speed 3G wireless data call on a commercial Lucent-supplied network, demonstrating a wireless web page download at a transmission rate ten times faster than what's now available on CDMA networks. 
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