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Texas Instruments Takes Legal Action Against Qualcomm, Citing Handset Royalty Discount Conditions

Sep 23, 2003

DALLAS (Sept. 23, 2003) -- Texas Instruments Incorporated (TI) (NYSE: TXN) announced today that it has filed a breach of contract action in Delaware Chancery Court against Qualcomm Incorporated.

TI’s lawsuit asks the court for an order to require Qualcomm to adhere to the terms of the cross-licensing agreement between the two companies and for an injunction to prohibit Qualcomm from making false or misleading statements about the parties' respective rights and obligations. TI has filed the complaint under seal since it refers to certain non-public sections of the agreement that describe the extent to which TI and Qualcomm may pass through chipset licenses to CDMA handset manufacturers.

"We brought this action," TI Senior Vice President and General Counsel Joseph F. Hubach said, "because we have received reports that Qualcomm is offering handset royalty discounts to handset manufacturers only if they purchase CDMA chipsets from Qualcomm. We are asking the Delaware court to enforce the terms of the agreement."

Qualcomm filed suit against TI on July 25 in the Delaware court over the issue of confidentiality of the agreement. On September 8, TI filed a motion to dismiss that suit, but the court has not yet ruled on the motion. The patent portfolio agreement between TI and Qualcomm was entered into in December 2000.

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Texas Instruments Incorporated provides innovative DSP and analog technologies to meet our customers' real world signal processing requirements. In addition to Semiconductor, the company's businesses include Sensors & Controls, and Educational & Productivity Solutions. TI is headquartered in Dallas, Texas, and has manufacturing, design or sales operations in more than 25 countries.

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