Broadcom-Emulex Issue Partly Settled - Analyst Blog
July 06 2012 - 4:45AM
Zacks
Recently, Broadcom
Corporation (BRCM) announced that the company entered into
a partial settlement and worldwide patent license agreement
regarding the ongoing patent litigation with Emulex
Corporation (ELX).
The company has been involved in a
patent infringement suit with Emulex since 2009. In September
2009, Broadcom filed a complaint against Emulex Corporation,
wherein it alleged that the latter infringed ten of its patents
relating to networking technologies.
Later, in subsequent filings,
Broadcom added two additional patents but withdrew six patents,
bringing the total to six asserted patents. Emulex denied the
charges stating that the asserted patents are invalid and not
infringed.
As per the settlement agreement,
certain of Broadcom's infringement claims against Emulex will be
dismissed. In addition, Emulex also received a license
for Broadcom U.S. Patents Nos. 7,471,691; 7,058,150; 6,424,194 and
related families for certain fields of use, including Fibre Channel
applications.
Management stated that Patent
No. 7,058,150 relates to the use of a phase interpolator to
optimize clock and data recovery in a high speed chip. However,
Patent No. 7,471,691 relates to the techniques used in Fibre
Channel Loop networking.
The fields of use licensed to
Emulex are related to the company’s existing portfolio and Emulex
will release and license fee of $58 million in cash to Broadcom.
Other terms of the agreement continue to be confidential while the
remainder of the existing litigation between the parties regarding
certain of Broadcom's U.S. Patents was not dismissed.
Earlier on March 19, Broadcom
Corporation announced that the United States District Court for the
Central District of California has issued an order,
whereby the court granted Broadcom a permanent injunction against
certain products of Emulex Corporation (ELX).
We continue to maintain a Neutral
recommendation on Broadcom Corporation. Our Neutral recommendation
is supported by Zacks #3 Rank, which translates into a short-term
rating of Hold.
BROADCOM CORP-A (BRCM): Free Stock Analysis Report
EMULEX CORP (ELX): Free Stock Analysis Report
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