Broadcom Granted Permanent Injunction Against Emulex in Patent Infringement Suit

Broadcom Granted Permanent Injunction Against Emulex in Patent Infringement Suit

IRVINE, Calif., March 19, 2012 /PRNewswire/ -- Broadcom Corporation (NASDAQ: BRCM), a global innovation leader in semiconductor solutions for wired and wireless communications, today announced that the United States District Court for the Central District of California issued a decision granting Broadcom's request for a permanent injunction against certain products of Emulex Corporation (NYSE: ELX) previously found to infringe two Broadcom patents: U.S. Patent Nos. 7,058,150 and 7,471,691.

"We are pleased with the Court's decision," said Art Chong, Broadcom's Executive Vice President, General Counsel and Corporate Secretary.  "The Court's decision recognizes the important principle that Broadcom should not have to compete against its own patents.  Broadcom will continue to vigorously protect its intellectual property rights, including seeking permanent injunctions against its competitors' sale of infringing products where appropriate."
The '150 Patent describes and claims the use of a phase interpolator to optimize clock and data recovery in a high speed chip, and is an important technology for achieving reliable performance in high speed data communications chips.  The '691 Patent describes and claims techniques used in Fibre Channel Arbitrated Loop networking.

The enjoined products include Emulex's BladeEngine 2 (BE2), BladeEngine 3 (BE3) and Lancer (XE201) chips and certain of Emulex's Fibre Channel switch products.  The BE2 and BE3 are 10 Gigabit Ethernet controllers, which are sold as stand-alone chips and used in Emulex's OneConnect™ Converged Network Adapters.  Lancer (XE201) is currently used in some of Emulex's Fibre Channel Host Bus Adapter (HBA) products.

The permanent injunction will prohibit Emulex from importing, manufacturing, using and selling the enjoined products in the United States and from assisting others in doing the same.  The injunction is subject to a "sunset" period.  For the '150 patent, the sunset started on October 12, 2011 and will run until April 12, 2013.  For the '691 patent, the sunset started on December 16, 2011 and will run until June 16, 2013.  During the sunset period, Emulex will be permitted to continue certain sales of enjoined products, but only for use in customer devices for which the customer had placed a firm order for production quantities of affected Emulex products prior to the start of the sunset period.  During the sunset period, Emulex will be required to pay Broadcom a royalty of 9 percent on those sales.  Emulex also will be prohibited from competing for new design-wins with the enjoined products. 

About Broadcom


Broadcom Corporation (NASDAQ: BRCM), a FORTUNE 500® company, is a global leader and innovator in semiconductor solutions for wired and wireless communications.  Broadcom® products seamlessly deliver voice, video, data and multimedia connectivity in the home, office and mobile environments.  With the industry's broadest portfolio of state-of-the-art system-on-a-chip and embedded software solutions, Broadcom is changing the world by Connecting everything®.  For more information, go to www.broadcom.com.

Emulex to Continue Redesign of Products

Emulex to Continue Redesign of Products Impacting Five Percent of Net Revenues

Court Approves Continued Shipment of Impacted Products Worldwide

COSTA MESA, Calif., March 19, 2012 – Emulex Corporation (NYSE: ELX) today reported the continued implementation of design changes for products impacted by the issuance of an injunction for two patents by the U.S. District Court for the Central District of California in the lawsuit filed against Emulex by Broadcom Corporation (NASDAQ: BRCM), based on U.S. revenues for sales of impacted products that were about five percent of Emulex’s net revenues for its second quarter of fiscal 2012. The injunction included a “sunset period” of 18 months for Emulex to continue selling impacted products in the US without design changes. Based on the jury assessment of royalties, and the terms of the injunction, Emulex estimates a charge of approximately $600,000 in liability for damages to Broadcom to its third quarter fiscal 2012 GAAP results. This amount is in addition to the $387,922 in liability previously reported by Emulex for that patent during the first quarter of 2012.

For its second fiscal quarter which ended on January 1, 2012, Emulex reported net revenues of $128.7 million, 76 percent (or $97.8 million) of which came from outside the US based on billed-to location. For the second fiscal quarter of fiscal 2012, the net revenues in the US for products impacted by issuance of the injunction were approximately $7 million. The design changes primarily focus on serializer/deserializer (SerDes) modules, which Emulex does not design but obtains from several suppliers, and which are included in impacted Emulex products. The impacted Emulex products include BE2, BE3, XE201, SOC 320, SOC 422 and SOC 442 ASICs, and products containing those ASICs.

“Emulex is dedicated to protecting the interest of its customers,” said Jim McCluney, the Chief Executive Officer of Emulex. “We have been working with our suppliers to implement design changes to the SerDes modules included in the impacted products.”

Broadcom had earlier asserted 12 different US patents against Emulex. Emulex presented a vigorous defense prior to the trial, and only 6 patents remained by the time of trial. After three weeks of trial, the court determined that one of the patents (7,058,150) had been infringed by Emulex, and the jury rendered an advisory verdict to the Court that it is not invalid, and awarded $387,922 in damages with respect to that patent. Subsequently, the judge determined that a second patent (7,471,691) had been infringed by Emulex. With respect to the remaining four patents, the jury found one not infringed and could not reach a unanimous verdict on the other three. Emulex intends to continue to vigorously defend its products, including a potential appeal.

About Emulex

Emulex, the leader in converged networking solutions, provides enterprise-class connectivity for servers, networks and storage devices within the data center. The Company's product portfolio of Fibre Channel host bus adapters, network interface cards, converged network adapters, controllers, embedded bridges and switches, and connectivity management software are proven, tested and trusted by the world's largest and most demanding IT environments. Emulex solutions are used and offered by the industry's leading server and storage OEMs including, Cisco, Dell, EMC, Fujitsu, Hitachi, Hitachi Data Systems, HP, Huawei, IBM, NEC, NetApp and Oracle. Emulex is headquartered in Costa Mesa, Calif., and has offices and research facilities in North America, Asia and Europe. More information about Emulex (NYSE:ELX) is available at www.Emulex.com.