Qualcomm Climbs on Chip Ruling

Qualcomm (QCOM Quote) shares jumped 4% after a federal appeals court temporarily lifted a ban on phone imports.

The U.S. Court of Appeals for the Federal Circuit said the ban on Qualcomm chips that infringe on Broadcom (BRCM Quote) patents unfairly punished phone makers like Motorola (MOT Quote), Samsung and LG, as well as telcos like AT&T (T Quote).

The ruling late Wednesday clears the way for these Qualcomm customers to import new 3G phones in time for the holiday buying season.

The decision was a rare legal victory for Qualcomm, which has been involved with several patent disputes and continues a major standoff over licensing agreements with phone giant Nokia (NOK Quote).

Earlier this year, the U.S. International Trade Commission determined that Qualcomm had infringed on Broadcom patents, and the commission prohibited imports of phones with these chips.

"We are pleased that the Court of Appeals recognized the undeserved harm to parties who were not named in the lawsuit, and that our customers will continue to be able to introduce new products into the U.S. marketplace during the appeals process," Qualcomm lawyer Alex Rogers said in a press release.

Fearing a disruption to its new phone introductions, Verizon negotiated a deal with Broadcom in July promising the chipmaker $6 for every phone and wireless data card that used the disputed wireless technology banned by the ITC.

Qualcomm shares rose $1.56 to $39.43 and Broadcom shares fell 18 cents to $35.19, in early trading Thursday.