Wireless chip manufacturer Qualcomm has been ordered by a Californian court to stop selling 3G, WCDMA cellular chips following a patent dispute.
A federal judge ruled that Qualcomm must immediately stop selling chips that infringe on rival Broadcom's patents.
Qualcomm is now restricted to only selling cellular chips it was offering as of 29 May 2007 (and only to customers it had as of that date) which was when a Santa Ana jury ruled that it had infringed on the Broadcom patents.
US District Judge James Selna did add, however, that Qualcomm can keep selling some chips whose designs infringe three patents held by rival Broadcom until 31 January 2009, although it will have to pay royalties.
The judge set royalties at 6% for a patent covering video compression for mobile phones and at 4.5% for another covering simultaneous communications between different types of networks.
He ordered Broadcom and Qualcomm to negotiate a royalty for a third patent covering walkie-talkie-style technology or be prepared to brief the court on an appropriate royalty on 29 February.
A Qualcomm spokeswoman told Reuters that the company's attorneys were reviewing the ruling and had no immediate comment.
Broadcom General Counsel David Dull said, however, that his company "pleased with the ruling".
He continued: "Broadcom should not have to compete against companies that use Broadcom's own patented technology against us, and this injunction puts a stop to Qualcomm doing just that".
However, in the meantime, Sprint Nextel has stated that it will continue with its plan to use Qualcomm chips, using one of the disputed patent technologies, in its phones.
The technology is called QChat and delivers a walkie-talkie cell phone service.
Broadcom had originally asked the judge to bar Qualcomm from selling chips used for the QChat feature.
This is despite the fact that Qualcomm had offered to pay three times the amount of a "reasonable royalty" so that it could continue using Broadcom's patented technology with no injunction.
The judge ruled that Qualcomm can continue to sell these chips to companies including Sprint Nextel, but only until the end of January 2009, the end of the so-called "sunset" period.
Sprint spokesman Matthew Sullivan told Reuters: "We're pleased the judge did not issue an immediate injunction on the patent related to QChat technology and we do not anticipate any interruption and delay in QChat deployment due to this dispute".
"We're still assessing the impact but at this time we think all our handset providers will be covered by the sunset provision."
This is the second major patent dispute that Qualcomm has been involved in in 2007.
It was also engaged in a bitter dispute with Nokia filed in June 2006.
Qualcomm accused Nokia of infringing three of its patents and asked the US International Trade Commission to bar the importation of the infringing technology.
However, Nokia won the first round of the bout when a administrative law judge ruled "...after a review of the record developed, [he] found inter alia that there is jurisdiction and that there is no violation".
Qualcomm said it would continue the fight, releasing a statement saying: "Under applicable ITC rules, Qualcomm intends to petition the commission for review of the ID (initial determination".
This battle is just one of many as there are about a dozen legal fights pending on three continents between Nokia and Qualcomm, according to Reuters.