Tag: broadcom

Apple-Broadcom Challenge to Caltech Patents Declined by US Supreme Court

The US Supreme Court on Monday declined to hear a bid by Apple and Broadcom to revive their challenges to Caltech data-transmission patents in a patent infringement case in which the university’s earlier $1.1 billion (nearly Rs. 9,000 crore) jury verdict against the companies was thrown out.

The justices turned away an appeal by Apple and Broadcom of a lower court’s ruling affirming a trial judge’s decision to prevent the companies from contesting the validity of the patents as they defended against the California Institute of Technology’s lawsuit.

The US Court of Appeals for the Federal Circuit, which specializes in patent cases, ruled against the companies’ arguments because they failed to bring them up during earlier proceedings at the US Patent and Trademark Office.

Apple and Broadcom have argued that they should have been allowed to raise the patent challenges during the trial.

A jury found that the companies infringed Caltech’s patents, ordering Apple to pay $837.8 million (nearly Rs. 6.900 crore) and Broadcom to pay $270.2 million (nearly Rs. 2,200 crore). The Federal Circuit took issue with the amount of the award, and sent the case back for a new trial on damages.

Caltech, located in Pasadena, California, sued Cupertino-based Apple and San Jose-based Broadcom in 2016 in federal court in Los Angeles, alleging that millions of iPhones, iPads, Apple Watches and other devices using Broadcom Wi-Fi chips infringed its data-transmission patents.

Apple is a major purchaser of Broadcom chips, and in January 2020 reached a supply agreement that ends in 2023. Broadcom has estimated that 20 percent of its revenue comes from Apple.

The Federal Circuit also upheld the trial judge’s decision to block the companies from arguing that the patents were invalid because they could have made the arguments in their petitions for USPTO review of the patents.

Apple and Broadcom told the Supreme Court that the Federal Circuit misread the law, which they said only blocks arguments that could have been raised during the review itself.

President Joe Biden’s administration urged the justices in May to reject the case and argued that the Federal Circuit had interpreted the law correctly.

Caltech has also sued Microsoft, Samsung Electronics, Dell Technologies and HP, accusing them of infringing the same patents in separate cases that are still pending.

© Thomson Reuters 2023

 

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Broadcom Said to Gain Conditional EU Antitrust Approval for VMware Deal

US chipmaker Broadcom is set to gain conditional EU antitrust approval for its $61 billion (nearly Rs. 5,03,000 crore) proposed acquisition of cloud computing firm VMware, people familiar with the matter said, sending its shares up by almost 5 percent.

The European Commission’s clearance is tied to remedies relating to Broadcom’s interoperability with rivals that would address competition concerns, the people said.

Both the EU antitrust watchdog, which is scheduled to decide on the deal by July 17, and Broadcom declined to comment.

Broadcom shares rose as much as 5 percent in early trade and were up 4.9 percent at evening. VMware was up 2.7 percent.

One of the remedies focuses on Fibre Channel Host-Bus Adapters (FC HBAs) and is targeted at rival Marvell Technology, one of the people said. Marvell Technology did not respond to a request for comment.

FC HBAs are storage adapters that connect servers to storage located outside the server on a storage-area network using the fiber channel protocol, typically through a switch. Broadcom is a leading supplier of FC HBAs.

Broadcom’s other key hurdle is in Britain where the British competition agency will next month announce its provisional findings about the deal and possible remedies if required.

Companies have become more wary about the Competition and Markets Authority (CMA) after it blocked Microsoft’s Activision deal while the EU cleared it.

The US Federal Trade Commission is also investigating Broadcom’s VMware acquisition.

Broadcom, which supplies chips used in data centres for networking and specialised chips that speed up AI work, announced the deal, its biggest, last year to diversify into enterprise software.

© Thomson Reuters 2023

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Apple to Use Custom Bluetooth and Wi-Fi Chip in 2025, Plans to Replace Broadcom: Report

Apple plans to replace a Broadcom chip from its devices with an in-house design in 2025, Bloomberg News reported on Monday, citing people familiar with the matter.

The iPhone maker has been working to limit its reliance on other chipmakers, having moved to its own line of chips for recent models of its Mac computers, replacing those from Intel.

Apple plans to replace Broadcom’s Wi-Fi and Bluetooth chip, according to the Bloomberg News report, which added that Apple is the US chipmaker’s largest customer.

The Cupertino, California-based company accounts for about 20 percent of Broadcom’s revenue.

Apple’s decision is likely to hit Broadcom revenue by about $1 billion (roughly Rs. 8,221 crore) to $1.5 billion (roughly Rs. 12,336 crore), said Stacy Rasgon, an analyst with financial services firm AB Bernstein.

He, however, added that Broadcom’s radio frequency, or RF, chips were complex to design and manufacture and were unlikely to be replaced in the short term.

Shares of Broadcom ended 2 percent lower.

Apple and Broadcom did not immediately respond to a Reuters request for comments.

Apple is also looking to swap out Qualcomm’s cellular modem chips with its own by the end of 2024 or early 2025, according to the report.

Qualcomm has said it believes Apple will phase out its chips. Apple uses Qualcomm’s X65 for 5G modem in its iPhone 14 line and is expected to deploy a newer version of the same chip in the iPhone 15 models likely to be released later this year, according to Jefferies’ analyst William Yang.

A Qualcomm spokesperson pointed to the company’s November statement where it said it expects “minimal contribution from Apple product revenue in fiscal ’25.”

© Thomson Reuters 2023

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Elon Musk’s Latest $7 Billion Twitter Funding Could Face US Regulator Scrutiny: Experts

Elon Musk’s decision to accept some foreign investors as part of his $44 billion (roughly Rs. 3,37,000 crore) buyout of Twitter runs the risk of inviting the kind of regulatory scrutiny over US national security that social media peer TikTok faced, legal experts say.

Musk disclosed on Thursday that Saudi Arabia’s Prince Alwaleed bin Talal, Qatar’s sovereign wealth fund and Binance, the world’s biggest cryptocurrency exchange founded by Chinese native Changpeng Zhao, were part of a group of investors that will help him fund the acquisition of Twitter.

This could give the Committee on Foreign Investment in the United States (CFIUS) an opening to scrutinize the deal for potential national security risks, six regulatory lawyers not involved in the transaction and interviewed by Reuters said. CFIUS is a panel of government agencies and departments that reviews mergers and acquisitions for potential threats to US security.

“To the extent that Musk’s proposed acquisition of Twitter includes foreign investment, it very well could fall under CFIUS jurisdiction,” said Chris Griner, chair of law firm Stroock & Stroock & Lavan LLP’s national security practice.

A spokesperson for the US Treasury Department, which chairs CFIUS, declined to comment on whether the national security panel planned to scrutinize Musk’s Twitter deal.

Spokespeople for Musk, bin Talal, Qatar and Binance did not immediately respond to requests for comment.

Former President Donald Trump’s administration turned to CFIUS in 2020 in a bid to force TikTok’s Chinese parent ByteDance to divest the short video app. His successor Joe Biden abandoned that effort after ByteDance agreed to changes on how the data of US users are stored and protected.

The regulatory lawyers interviewed by Reuters said the risk of CFIUS blocking Musk’s deal is small because he will control Twitter under the proposed takeover and the foreign investors are acquiring relatively small stakes.

They added that their assessment would change were Musk to give the foreign investors influence over the company, through a seat on its board or other means.

The risk is not negligible, however, given that the business of handling personal data by social media companies such as Twitter is typically viewed as critical infrastructure by CFIUS, the lawyers said.

“One of the items that’s considered sensitive personal data, is non-public electronic communications. So that would be email, messaging or chat communications between users. Twitter allows you to do that,” law firm Vinson & Elkins LLP partner Richard Sofield said.

One area of potential scrutiny for CFIUS, the lawyers said, could be Musk’s business dealings with foreign governments hostile to free speech or keen to overtake the United States technologically. Tesla, the electric car maker he leads, relies heavily on China, for example, to manufacture and sell its vehicles.

China blocked Twitter in 2009 but many Chinese officials have been active on the social media platform. Some of them have complained that the company’s efforts to restrict misinformation have targeted them unfairly.

“One of the considerations would be whether or not there will be an opportunity for China to leverage its business activity in order to achieve a desired outcome,” Sofield added.

BROADCOM PRECEDENT

There is precedent for CFIUS shooting down a deal based on the risk that an acquirer’s business ties could compromise them, the lawyers said. Trump blocked chip maker Broadcom $117 billion (roughly Rs. 8,99,595 crore) acquisition of US peer Qualcomm 2018 after CFIUS raised concerns about the deal.

Broadcom was a publicly listed company with US shareholders that was headquartered in Singapore, but the White House fretted that Broadcom’s relationship with “third-party foreign entities” would set the US back in its technology race with China.

Nevena Simidjiyska, a regulatory lawyer at law firm Fox Rothschild LLP, said it was possible CFIUS would look into whether Musk or other US investors in the Twitter deal can be influenced by foreign entities in a similar way.

“CFIUS may determine that even US investors in Twitter fall under CFIUS review if they are controlled by foreign parties,” Simidjiyska said.

Musk’s Twitter deal does not face the most common type of regulatory risk seen in mergers and acquisitions — pushback from antitrust regulators. The world’s richest man has no media holdings, and regulatory experts have said they do not expect the deal to face significant antitrust scrutiny.

© Thomson Reuters 2022

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