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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