ParkerVision Inc., (PRKR:US) a designer of wireless communication networks, soared the most since February after it won the first phase of a trial in which it’s seeking hundreds of millions of dollars in patent royalties from Qualcomm Inc. (QCOM:US) over chip technology.
Qualcomm infringed ParkerVision patents and none were invalid, a federal jury in Orlando, Florida, said today. The jury decision came after more than a week of testimony and two days of deliberations. ParkerVision rose $2.06, or 61 percent, to $5.43 at 4 p.m. in New York trading of 19 million shares, 23 times the three-month daily average.
A second phase now begins to determine how much Qualcomm should pay and whether the infringement was intentional, which could mean an even higher damage amount. ParkerVision claims Qualcomm, which owns the most widely used technology standard in mobile phones with Internet access, was the chief impediment to its wireless designs being adopted by the telecommunications industry.
“We are extremely pleased with the jury’s verdict in this case and we look forward to presenting our damages and willfulness arguments over the coming days,” ParkerVision Chief Executive Officer Jeffrey Parker said in a statement.
Qualcomm said it was disappointed in the verdict. “There is still more to come in this case so we cannot comment further at this time,” said Christine Trimble, a spokeswoman for San Diego-based Qualcomm.
Investors have been counting on Jacksonville, Florida-based ParkerVision to win.
ParkerVision lost $13.6 million in the first half of this year and had no revenue. The company said it showed the technology to Qualcomm in the late 1990s during failed licensing negotiations, then discovered in 2011 that Qualcomm had incorporated the inventions in its chips for smartphones. Qualcomm’s baseband chips are the key component in phones such as Apple Inc.’s iPhone and high-end models in Samsung Electronics Co.’s Galaxy line.
The four patents cover ways to convert electromagnetic signals from higher frequencies to lower frequencies. This makes receivers in mobile phones and tablets smaller, more power efficient and more effective. Qualcomm claimed it never used the technology and came up with its own ideas.
The trial before U.S. District Judge Roy Dalton focused on ParkerVision’s claim that Qualcomm infringed the patents and Qualcomm’s contention that they were invalid. While ParkerVision is seeking about $500 million in damages, Qualcomm contends the patents have little value because they’ve never been integrated into anyone else’s chips.
ParkerVision said in a court filing that, in 1999, Qualcomm executives discussed looking at the patent applications, and the senior vice president for technology said it would be “very difficult for anybody to ever use this technique without stepping on one or more” of the claims in the patent.
“This case shows that little companies can take on gigantic infringers and receive justice in America,” said Dan Ravicher, a patent lawyer who attended the trial. “ParkerVision is not a troll, as this is their only suit. They tried to work with Qualcomm first, and the patents are their own that they invented.”
Ravicher, the executive director of the Public Patent Foundation, a group that often challenges patents on public policy grounds, said there were internal e-mails shown to the jury in which Qualcomm called the technology “revolutionary” and the “holy grail.”
The suit targets Qualcomm transceiver chips, which have names like Astra, Hercules, Iceman, Magellan, Napoleon, Solo and Voltron, used in phones and other electronic devices.
Qualcomm gets the bulk of its profits from patent-licensing and reported $6.24 billion in revenue in the second quarter. Qualcomm had more than $30 billion of cash and marketable securities at the end of the quarter.
ParkerVision said in its second-quarter report that it’s been working to incorporate its radio frequency technology into customers of Via Telecom Inc.
The case is ParkerVision v. Qualcomm, 11cv719, U.S. District Court for the Middle District of Florida (Orlando).
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