Broadcom Settles PCTel’s Patent Suit

Broadcom Corp., which makes communications chips for cable modems, set-top boxes and home-networking products, said Tuesday that it would pay PCTel Inc. $3.5 million and become a customer to resolve a patent-infringement lawsuit.

PCTel, a Chicago maker of wireless-networking software, agreed to drop its lawsuit and to license Broadcom’s use of modem patents and two ethernet-networking patents.

PCTel also promised not to sue Broadcom for infringing any other patents.

PCTel sued 3Com Corp., Agere Systems Inc., Lucent Technologies Inc. and U.S. Robotics Corp., along with Broadcom, earlier this year. Chicago-based PCTel claimed that its former competitors were using its patented inventions for modems without permission.

“We’ve had discussions with all the litigants regarding settlements,” said Jeff Miller, PCTel’s vice president of business development and licensing. “Some have been more productive than others.”

Broadcom will license PCTel’s segue roaming client software and pay royalties for modem sales after 2004. Miller said the amount paid depended on the number of modems Broadcom sells.

Jeff Thermond, general manager of Broadcom’s home and wireless networking business, said the settlement would “allow us to focus on the operations of our business and its future” while increasing the Irvine company’s portfolio of communications patents.

PCTel switched its focus from modems to development of software to improve wireless fidelity, known as Wi-Fi, which allows high-speed Internet access without cables or telephone lines.

Shares of PCTel fell 12 cents to $8.44. Broadcom declined 59 cents to $32.52. Both are listed on Nasdaq.