Qualcomm restructures itself for summer, R&D division becomes wholly owned subsidiary

You know all those lawsuits swirling about in the tech industry? Yeah... Qualcomm is looking to avoid some of the weighty implications of courtroom battles with an air gap strategy that will restructure its R&D division into a new, wholly owned subsidiary known as Qualcomm Technologies, Inc. (QTI). While the parent company will retain the company's existing patent portfolio, QTI will be responsible for product development and the existing semiconductor business. Interestingly enough, it's also said that the subsidiary will ramp up its use of open source software, and it'll strive to avoid the patents of parent company, Qualcomm. It's also said that the restructuring will help the business bring its products to market more quickly, and if the company is able to avoid just one lawsuit / injunction, it may be very correct with that assertion.

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Qualcomm Announces Plans to Implement a New Corporate Structure

SAN DIEGO – June 28, 2012 – Qualcomm Incorporated (NASDAQ: QCOM), a leading developer and innovator of advanced wireless technologies, products and services, today announced plans to modify its corporate structure. The corporate structure changes are being implemented, among other reasons, in order to enhance Qualcomm's ability to quickly deliver products to its customers, while further protecting and insulating its valuable patent portfolio from any claims resulting from actions and activities by portions of the company other than the Qualcomm Technology Licensing Division (QTL). Qualcomm is not undergoing this restructuring in anticipation, or as part, of spinning out either the QTL or QCT business, nor is this change in response to any third party actions or claims.

The new corporate structure will feature the parent company, Qualcomm Incorporated, which includes QTL and corporate functions, as well as most of Qualcomm's patent portfolio; and a new wholly owned subsidiary, Qualcomm Technologies, Inc. (QTI), which, along with its subsidiaries, will operate substantially all of Qualcomm's research and development activities, as well as product and services businesses, including its semiconductor business, QCT.

The change in Qualcomm's corporate structure generally formalizes the way the company has been operating, and will continue to operate, its primary businesses. However, the company expects that QTI and its subsidiaries' product and services businesses will increase their work with open source software in the future and this restructuring will, among other things, help ensure that QTI and its subsidiaries' activities do not result in the licensing of any of Qualcomm Incorporated's patents, including its 3G and 4G patents.

Under the new structure, QTI and its subsidiaries will own patents specifically developed for purposes of providing open source software contributions by QTI and its subsidiaries, whereas substantially all of the remainder of the company's patent portfolio will continue to be owned by Qualcomm Incorporated. QTI and its subsidiaries will have no rights to grant licenses or other rights to patents held by Qualcomm Incorporated. There will be no changes to the intellectual property that is currently owned by Qualcomm Innovation Center, Inc., which works closely with the open source community to accelerate the advancement of the wireless industry as a whole.

"Our internal reorganization will provide even greater protection for our industry-leading intellectual property portfolio as our products and services businesses seek to accelerate innovation and deliver our products to market quickly," said Dr. Paul E. Jacobs, chairman and CEO. "We are confident that this change to our corporate structure will be accomplished with little to no disruption to employees and customers. As always, Qualcomm remains committed to being a company that creates, develops, sells and licenses state of the art technology through its products and services businesses, as well as its licensing business."

Qualcomm anticipates that the new corporate structure will become effective during the first fiscal quarter of 2013 and does not expect any change to the way in which it defines its operating segments for financial reporting purposes as a result of this restructuring