Qualcomm, the San Diego-based chipmaker and holder of key wireless patents, is reviled by most everyone. Mobile phone manufacturers hate being dependent on their chips and patented technologies. Nokia in particular is fighting its high licensing fees and is embroiled in several lawsuits. European regulators are investigating whether or not the company's fees are too high. Fiercely protective of its own patents, Qualcomm is accused of infringing competitor Broadcom's patents. That dispute led a U.S. trade commission to ban the import of some devices containing Qualcomm chips. Judge Rudi Brewster scolded the company for withholding evidence related to the Broadcom case, which led to Qualcomm's own lawyers pointing the finger at their client. And none of it matters because Qualcomm continues to keep investors happy.
The stock continues to outperform many others in the chip sector. Grudgingly, mobile phone makers are using more and more Qualcomm chips and patents. Even if it is forced to reduce licensing fees in Europe, Qualcomm has unprecedented revenue from patents — $11 billion over seven years on more than 5,000 patents. And it has perfected the business of patent holding. They are now striking into the WiMax market by acquiring key patent holders in the burgeoning new technology. For Qualcomm, being hated is a good thing, and investors love that Qualcomm is hated. "Why are people coming after us in the courts? Because we're winning in the marketplace," CEO Paul Jacobs says. In the marketplace, or in patent offices? The way our patent system works today, it amounts to the same thing.
