Free Motion to Dismiss - District Court of California - California

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

BROADCOM CORPORATION, Plaintiff, v. QUALCOMM INCORPORATED, Defendant.

Civil Action No. 05-3350 (MLC)

Return Date: February 19, 2008 Oral Argument Requested

MEMORANDUM IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS CLAIMS FOUR THROUGH EIGHT OF PLAINTIFF'S SECOND AMENDED COMPLAINT

McCARTER & ENGLISH, LLP Four Gateway Center 100 Mulberry Street Newark, NJ 07102 CRAVATH, SWAINE & MOORE LLP Worldwide Plaza 825 Eighth Avenue New York, NY 10019 BINGHAM MCCUTCHEN LLP 399 Park Avenue New York, NY 10022 CONRAD O'BRIEN GELLMAN & ROHN, P.C. 1515 Market Street, Suite 1600 Philadelphia, PA 19102 Attorneys for Defendant Qualcomm Incorporated

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Table of Contents Page TABLE OF AUTHORITIES ..................................................................................................... iii PRELIMINARY STATEMENT................................................................................................. 1 STATEMENT OF FACTS ......................................................................................................... 1 ARGUMENT ............................................................................................................................. 4 I. BROADCOM'S STATE LAW CLAIMS SHOULD BE DISMISSED FOR FAILURE TO ADEQUATELY PLEAD THAT QUALCOMM'S ALLEGED CONDUCT CAUSED BROADCOM ANY ACTUAL INJURY..................................... 4 A. Broadcom Does Not Adequately Plead Injury or Causation ................................. 4 1. 2. 3. B. II. FRAND Licensing Theory....................................................................... 6 Patent Disclosure Theory ......................................................................... 8 802.20 Theory.......................................................................................... 9

Broadcom's State Law Claims are Unripe for Adjudication ............................... 10

BROADCOM ALSO FAILS TO PLEAD OTHER ESSENTIAL ELEMENTS OF EACH OF ITS STATE LAW CLAIMS ........................................................................ 13 A. Broadcom Does Not Adequately Plead a Claim for Breach of Contract ............. 13 1. 2. B. C. D. E. Generally ............................................................................................... 13 Additional Deficiencies for Claims Based on Commitments to ATIS or ARIB ..................................................................................................... 14

Broadcom Does Not Adequately Plead a Claim for Promissory Estoppel........... 15 Broadcom Does Not Adequately Plead a Claim for Tortious Interference with Prospective Economic Advantage.............................................................. 16 Broadcom Does Not Adequately Plead a Claim for Fraud.................................. 17 Broadcom Cannot State a Claim Under the UCL ............................................... 19 1. Broadcom Lacks Standing Under the Express Terms of the UCL................................................................................................. 19

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Page 2. III. Broadcom Fails to State a Claim Under the "Unlawful" or "Fraudulent" Prongs of the UCL ............................................................ 21

BROADCOM'S CLAIMS BASED ON THE H.264 STANDARD SHOULD BE DISMISSED ON THE BASIS OF THE COMPULSORY COUNTERCLAIM RULE AND RES JUDICATA ...................................................................................... 22 A. B. Broadcom Is Barred by the Compulsory Counterclaim Rule From Asserting Any Claims Relating to JVT and the H.264 Standard......................... 24 Broadcom Is Also Barred by Res Judicata From Asserting Any Claims Relating to JVT and the H.264 Standard............................................................ 27

CONCLUSION ........................................................................................................................ 30

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Table of Authorities Page(s) Cases AccuImage Diagnostics Corp. v. TeraRecon, Inc., 260 F. Supp. 2d 941 (N.D. Cal. 2003) .................................................................................................................................... 16 Angelucci v. Century Super Club, 41 Cal. 4th 160 (2007) ........................................................... 6 Armstrong World Indus. v. Adams, 961 F.2d 405 (3d Cir. 1992) ............................................... 11 Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955 (2007)..................................................................... 4 Blank v. Kirwan, 39 Cal. 3d 311 (1985) ...................................................................................... 4 Bowen v. First Family Fin. Svcs., 233 F.3d 1331 (11th Cir. 2000) .............................................. 5 Bradley v. Google, Inc., No. 06-05289, 2006 WL 3798134 (N.D. Cal. Dec. 22, 2006) .................................................................................................................................... 17 Bristol Farmers Mkt. & Auction Co. v. Arlen Realty & Dev. Corp., 589 F.2d 1214 (3d Cir. 1978) ....................................................................................................................... 25 Broadcom v. Qualcomm, 501 F.3d 297 (3d Cir. 2007) .............................................................. 10 Brown v. Allstate Ins. Co., 17 F. Supp. 2d 1134 (S.D. Cal. 1998).............................................. 17 Buckland v. Threshold Enters., Ltd. 155 Cal. App. 4th 798 (2007)...................................5, 19, 20 Cadlo v. Owens-Illinois, Inc., 125 Cal. App. 4th 513 (2004) ..................................................... 18 Californians for Disability Rights v. Mervyn's, LLC, 39 Cal. 4th 223 (2006) ...................... 19, 20 Careau & Co. v. Sec. Pac. Bus. Credit, 222 Cal. App. 3d 1371 (1990)........................................ 5 Churchill v. Star Enters., 183 F.3d 184 (3d Cir. 1999) .............................................................. 29 Constantini v. Trans World Airlines, 681 F.2d 1199 (9th Cir. 1982) ......................................... 29 Danvers Motor Co., Inc. v. Ford Motor Co., 186 F. Supp. 2d 530 (D.N.J. 2000)......................... 8 Daro v. Superior Court, 151 Cal. App. 4th 1079 (2007) ................................................19, 21, 22 Ferguson v. Lieff, Cabraser, Heimann & Bernstein, 30 Cal. 4th 1037 (2003).............................. 7 Great Lakes Rubber Corp. v. Herbert Cooper Co., 286 F.2d 631 (3d Cir. 1961) ....................... 25

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Page(s) Hartless v. Clorox Co., No. 06CV2705, 2007 WL 3245260 (S.D. Cal. Nov. 2, 2007) .................................................................................................................................... 21 Henry v. Weinman, 157 Cal. App. 2d 360 (1958)........................................................................ 5 In re Global Crossing, Ltd. Sec. Litig., No. 02-910, 2004 WL 725969 (S.D.N.Y. Apr. 2, 2004) ........................................................................................................................ 17 Int'l Union of Operating Eng'rs-Employers Constr. Indus. Pension, Welfare and Training Trust Funds v. Karr, 994 F.2d 1426 (9th Cir. 1993)................................................ 29 Jensen Enter. Inc. v. Oldcastle, Inc., No. 06-00247, 2006 WL 2583681 (N.D. Cal. Sept. 7, 2006) ....................................................................................................................... 21 Johnson v. Holmes Tuttle Lincoln-Mercury, Inc., 160 Cal. App. 2d 290 (1958) ........................ 14 Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 (2003)................................ 20, 21 Landes v. Tartaglione, No. Civ. A. 04-3163, 2004 WL 2415074 (E.D. Pa. Oct. 28, 2004) ...................................................................................................................................... 8 Lee v. Am. Express Travel Related Svcs., No. C 07-04765, 2007 WL 4287557 (N.D. Cal. Dec. 6, 2007) ......................................................................................................... 9 Linear Tech. Corp. v. Applied Materials, Inc., 152 Cal. App. 4th 115 (2007)...................... 18, 22 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ................................................................... 5 Lum v. Bank of Am., 361 F.3d 217 (3d Cir. 2004) ................................................................. 1, 17 Masters v. San Bernardino County Employees Retirement Ass'n, 32 Cal. App. 4th 30 (1995).............................................................................................................................. 17 McDonald v. John P. Scripps Newspaper, 210 Cal. App. 3d 100 (1989) ..................................... 7 Mirkin v. Wasserman, 5 Cal. 4th 1082 (1993) ........................................................................... 18 Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. City Sav., F.S.B., 28 F.3d 376 (3d Cir. 1994) ............................................................................................................................. 28 Olsen v. Breeze, Inc., 48 Cal. App. 4th 608 (1996).................................................................... 22 Pac. Legal Found. v. Cal. Coastal Comm'n, 33 Cal. 3d 158 (1982) .................................... 10, 11 Paramount Aviation Corp. v. Augusta, 178 F.3d 132 (3d Cir. 1999) ......................................... 28 Peasley v. Verizon Wireless LLC, 364 F. Supp. 2d 1198 (S.D. Cal. 2005) ................................. 28 iv
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Page(s) Penn. Family Inst. v. Black, 489 F.3d 156 (3d Cir. 2007).................................................... 10, 11 Philadelphia Fed. of Teachers v. Ridge, 150 F.3d 319 (3d Cir. 1998) ....................................... 11 Phillips Pet. Co. v. U.S. Steel Corp., 566 F. Supp. 1093 (D. Del.), aff'd mem., 727 F.2d 1120 (3d Cir. 1983) ...................................................................................................... 26 Post v. Hartford Ins. Co., 501 F.3d 154 (3d Cir. 2007) ....................................................... 29, 30 Qualcomm Inc. v. Broadcom Corp., No. 05CV1958 B, 2007 WL 2296441 (S.D. Cal. Aug. 6, 2007) ................................................................................................................ 24 Qualcomm Inc. v. Broadcom Corp., No. 05CV1958, 2007 WL 1031373 (S.D. Cal. Mar. 21, 2007)...................................................................................................................... 24 Reid v. Google, Inc., 155 Cal. App. 4th 1342 (2007)................................................................. 21 Rennie & Laughlin, Inc. v. Chrysler Corp., 242 F.2d 208 (9th Cir. 1957) ................................. 28 Riverside Mem'l Mausoleum, Inc. v. UMET Trust, 581 F.2d 62 (3d Cir. 1978) ......................... 28 Rosenbluth Int'l, Inc. v. Superior Court, 101 Cal. App. 4th 1073 (2002)................................... 22 Ross v. Bd. of Educ. of Twp. High Sch. Dist. 31, No. 05 C 6111, 2006 WL 695471 (N.D. Ill. Mar. 14, 2006)....................................................................................................... 23 Schwarz Pharma, Inc. v. Teva Pharms., U.S.A., Civ. No. 01-4995 Slip Op. (D.N.J. June 5, 2002) .................................................................................................................. 25, 26 S.C. Johnson & Son v. Dowbrands, Inc., 167 F. Supp. 2d 657 (D. Del. 2001) ..................... 11, 12 Serv. by Medallion, Inc. v. Clorox Co., 44 Cal. App. 4th 1807 (1996)......................................... 5 Smith v. City & Cty. of San Francisco, 225 Cal. App. 3d 38 (1990) .................................... 15, 16 Sofias v. Bank of America, 172 Cal. App. 3d 583 (1985)........................................................... 13 Step-Saver Data Sys. v. Wyse Tech., 912 F.2d 643 (3d Cir. 1990) ....................................... 11, 12 Storino v. Borough of Point Pleasant Beach, 322 F.3d 293 (3d Cir. 2003) .............................. 5, 8 SunCom Mobile v. FCC, 87 F.3d 1386 (D.C. Cir. 1996) ............................................................. 8 SWT Acquisition Corp. v. TW Svcs, Inc., 700 F. Supp. 1323 (D. Del. 1988) .............................. 11 Toscano v. Greene Music, 124 Cal. App. 4th 685 (2004) .......................................................... 15 v
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Page(s) Transamerica Occ. Life Ins. Co. v. Aviation Office of Am., Inc., 292 F.3d 384 (3d Cir. 2002) ............................................................................................................................. 25 Traverso v. Home Depot U.S.A., Inc., No. 07-1324, 2007 WL 3124698 (D.N.J. Oct. 23, 2007)......................................................................................................................... 4 Van Deerhoof v. Chambon, 121 Cal. App. 118 (1932) .............................................................. 13 W. Sys., Inc. v. Ulloa, 958 F.2d 864 (9th Cir. 1992) .................................................................. 30 Waterloov Gutter Prot. Sys. Co. v. Absolute Gutter Prot., 64 F. Supp. 2d 398 (D.N.J. 1999)........................................................................................................................ 26 Westside Center Assocs. v. Safeway Stores 23 Inc., 42 Cal. App. 4th 507 (1996) ...................... 16 Xerox Corp. v. SCM Corp., 576 F.2d 1057 (3d Cir. 1978)......................................................... 25 Statutes and Rules Cal. Bus. & Prof. Code § 17204............................................................................................ 4, 19 Cal. Civ. Code § 1559 .............................................................................................................. 14 Cal. Civ. Proc. Code § 426.30................................................................................................... 25 Fed. R. Civ. P. 12(h)(3) .............................................................................................................. 5 Fed. R. Civ. P. 13(a) ................................................................................................................. 24 Fed. R. Civ. P. 9(b)................................................................................................................... 17

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Page(s) Other Authorities 13A Wright & Miller, Federal Practice and Procedure § 3532 .................................................. 10 13A Wright & Miller, Federal Practice and Procedure § 3532.1................................................ 10 23 Cal. Jur. 3d Damages § 31 ..................................................................................................... 7 3 James Wm. Moore et al., Moore's Federal Practice § 13.90 ................................................... 28 5 Witkin Cal. Proc. 4th § 862...................................................................................................... 6 6 Wright & Miller, Federal Practice and Procedure § 1410............................................25

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Preliminary Statement Nowhere in Broadcom Corporation's ("Broadcom") 72 page, 329 paragraph complaint does Broadcom allege facts, which if true, would establish that it has suffered or will suffer actual injury as a result of the alleged actions of Qualcomm Incorporated ("Qualcomm") that underlie each of Broadcom's state law claims for relief. This failure is fatal because an essential element of each state law claim is a showing of such injury. In addition, Broadcom fails to plead other essential elements of each of its state law claims. Further, certain of Broadcom's state law claims are barred by the compulsory counterclaim rule and res judicata. Accordingly, Qualcomm moves to dismiss Broadcom's state law claims for relief. Statement of Facts1 Broadcom, a California corporation, is "a supplier of semiconductors for wired and wireless broadband communications". (¶¶ 1-2.) Qualcomm is a Delaware corporation that, among other things, develops technology related to wireless communications and holds patents on such technology. (¶¶ 1, 3, 46.) Broadcom's Second Amended Complaint ("SAC") contains five state law causes of action: breach of contract (Count IV); tortious interference with prospective economic advantage (Count V); promissory estoppel (Count VI); fraud (Count VII); and alleged violations of California's Unfair Competition Law ("UCL") (Count VIII). Three sets of factual allegations underlie these state law claims, each arising out of Qualcomm's participation in various standards development organizations ("SDOs").2 First,

1

For purposes of this motion, we rely only on the allegations in the complaint, matters of public record, and documents that form the basis of Broadcom's claims. See Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir. 2004). Citations in the form (¶ [number]) are citations to the referenced paragraph of Broadcom's Second Amended Complaint. 2 SDOs are nongovernmental organizations responsible for the development of standards to ensure the compatibility and interoperability of the products made by different manufacturers. (¶¶ 5, 18-19.) The principal SDOs that the SAC focuses on are the European

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Broadcom alleges that Qualcomm entered into certain obligations with various SDOs to license Qualcomm's patents that are essential for practicing a standard developed by that SDO on fair, reasonable and non-discriminatory ("FRAND") terms. (E.g., ¶¶ 7, 108, 166-68, 245-46.) Broadcom alleges that Qualcomm breached these obligations because Qualcomm did not offer Broadcom a FRAND license to practice the patents that Qualcomm "claims are essential" to the standards at issue (the "FRAND license theory"). (Id.) However, Broadcom never alleges that any of Qualcomm's patents actually is essential to practice any standard at issue. Nor does Broadcom identify how its development, manufacture, marketing or sale of a single product has been adversely affected by the absence of a license from Qualcomm. Second, Broadcom claims that as a result of Qualcomm's participation in certain SDOs, Qualcomm was obligated to timely inform those SDOs of all patents Qualcomm held that Qualcomm believed were essential to the standards under consideration so that the SDO could determine whether to include that intellectual property ("IP") in a given standard. (E.g., ¶¶ 7981.) Broadcom asserts that Qualcomm breached this obligation to the SDOs by disclosing its patents later than it should have disclosed them ("patent disclosure theory"). (E.g., ¶¶ 96-97, 144-47, 195-98.) However, Broadcom does not allege that any standard developed by an SDO actually incorporates technology covered by Qualcomm's patents or that any such standard would not incorporate such technology but for Qualcomm's allegedly untimely disclosure. And,

Telecommunications Standards Institute ("ETSI"), the Joint Video Team ("JVT") and the Institute of Electrical and Electronics Engineers ("IEEE") 802.20 working group. ETSI led the standardization process for the Global System for Mobility ("GSM") family of wireless standards, including GSM Packet Radio Service ("GPRS"), Enhanced Data Rates for GSM Evolution ("EDGE"), and Universal Mobile Telecommunications System ("UMTS"). (¶ 30.) The JVT is an SDO whose purpose is to develop H.264, a video compression standard with improved compression and picture quality. (¶¶ 173-74.) Lastly, the IEEE 802.20 working group is developing a standard known as IEEE 802.20, which relates to fourth-generation wireless technology. (¶¶ 247-49.) 2
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with respect to certain standards, Broadcom does not allege that it was making or developing standard-compliant products at the time Qualcomm allegedly breached its disclosure obligations. Third, Broadcom alleges that Qualcomm breached its obligation to a specific SDO, the IEEE, by not disclosing the "financial relationships" of certain participants in the group working on the 802.20 standard ("802.20 theory"). (¶¶ 261-68, 294.) However, Broadcom does not allege that it is involved in making 802.20 standard compliant products. In fact, Broadcom complains that no 802.20 standard was ever promulgated. (¶¶ 265, 268.) These three factual theories of wrongdoing have been packaged into five state law causes of action, summarized as follows: · Breach of Contract (Count IV): Broadcom alleges that Qualcomm, by virtue of its membership in various SDOs, entered into contracts with those SDOs which Qualcomm breached by failing to license its potentially essential patents on FRAND terms to Broadcom and by disclosing certain patents too late. (¶¶ 289-296.) · Tortious Interference with Prospective Economic Advantage (Count V): Broadcom alleges that Qualcomm's conduct interfered with Broadcom's economic opportunities with unidentified manufacturers. (¶¶ 297-301.) · Promissory Estoppel (Count VI): Broadcom alleges that Qualcomm made promises to it, through Qualcomm's promises to various SDOs, that Qualcomm would disclose its potentially essential patents and license Qualcomm's essential IP on FRAND terms and that Broadcom oriented its chipset business in reliance on these promises. (¶¶ 302-307.) · Fraud (Count VII): Broadcom alleges that Qualcomm committed common law fraud by intentionally failing to disclose its potentially essential patents to the SDOs and its financial relationships with members of the IEEE 802.20 working group and further asserts that Qualcomm's commitments to SDOs and the public to license on FRAND terms were knowingly and intentionally false. (¶¶ 308-17.) · UCL (Count VIII): Broadcom asserts that Qualcomm has violated the UCL by engaging in unlawful, unfair and fraudulent business acts and practices with respect to Qualcomm's FRAND licensing and patent disclosure obligations and Qualcomm's conduct before the IEEE. (¶¶ 318-29.)

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Argument I. BROADCOM'S STATE LAW CLAIMS SHOULD BE DISMISSED FOR FAILURE TO ADEQUATELY PLEAD THAT QUALCOMM'S ALLEGED CONDUCT CAUSED BROADCOM ANY ACTUAL INJURY On a motion to dismiss under Rule 12(b)(6), a court should generally accept as true all well-pled factual allegations in the complaint. See Traverso v. Home Depot U.S.A., Inc., No. 07-1324, 2007 WL 3124698, *1 (D.N.J. Oct. 23, 2007) (Cooper, J.). The court, however, need not credit a plaintiff's legal conclusions, and a plaintiff's factual allegations must raise a right to relief above the speculative level. Id. (citing Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007)). To survive a motion to dismiss, a complaint must, on its face, allege enough facts to state a claim that is plausible, and not merely conceivable. See Twombly, 127 S. Ct. at 1960. Broadcom's failure to plead that Qualcomm's alleged actions have actually caused Broadcom injury requires dismissal of Broadcom's state law claims. This holds true whether Broadcom's claims are analyzed under the rubric of the need to plead injury and causation or under the ripeness doctrine. A. Broadcom Does Not Adequately Plead Injury or Causation Causation and injury are essential elements of every state law claim asserted by Broadcom.3 See, e.g., Cal. Bus. & Prof. Code § 17204 (only persons "who ha[ve] suffered injury in fact and ha[ve] lost money or property as a result of . . . unfair competition" have standing to bring UCL claims); Blank v. Kirwan, 39 Cal. 3d 311, 330 (1985) (requiring, in the tortious
3

Broadcom does not plead the source of law governing its state law claims. However, Broadcom's assertion of a claim under the UCL, coupled with the fact that Broadcom originally brought many of the SAC's state law claims in a California court and affirmatively argued for the applicability of California law, indicate that Broadcom considers California law controlling. See, e.g., Broadcom's Opposition to Qualcomm's Motion to Stay the Proceedings, at 6-9 (filed Oct. 5, 2007) (attached as Exhibit 1 to the Declaration of William J. O'Shaughnessy in Support of Defendant's Motion to Dismiss Claims for Relief Four through Eight of Plaintiff's Second Amended Complaint (hereinafter "O'Shaughnessy Decl.")). For the purposes of this motion, Qualcomm analyzes Broadcom's state law causes of action under California law. 4
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interference context, economic harm to the plaintiff caused by the acts of the defendant); Careau & Co. v. Sec. Pac. Bus. Credit, 222 Cal. App. 3d 1371 (1990) ("a cause of action for damages for breach of contract is comprised of the following elements: [the contract, plaintiff's performance, defendant's breach] and the resulting damages to plaintiff"); Serv. by Medallion, Inc. v. Clorox Co., 44 Cal. App. 4th 1807, 1818 (1996) (requiring injury causation in the fraud context) (internal citations omitted); Henry v. Weinman, 157 Cal. App. 2d 360, 367 (1958) (promissory estoppel context). In addition, Article III of the U.S. Constitution requires that a plaintiff bear the burden of establishing that it has standing to pursue each cause of action it seeks to advance. See Storino v. Borough of Point Pleasant Beach, 322 F.3d 293, 296 (3d Cir. 2003); Bowen v. First Family Fin. Servs., 233 F.3d 1331, 1339 (11th Cir. 2000). To establish Article III standing, a plaintiff must plead that it has suffered a concrete and particularized injury in fact that is not conjectural or hypothetical, that was caused by the defendant and that it is likely a decision in the plaintiff's favor will redress its injury. Bowen, 233 F.3d at 1339-40 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).4 Though the California constitution does not contain an express case or controversy requirement, California courts have employed the Lujan test for standing. See Buckland v. Threshold Enters., Ltd., 155 Cal. App. 4th 798, 814-16 (2007) (applying Lujan and

4

Qualcomm moves to dismiss only Broadcom's state law claims for relief. Nevertheless, Qualcomm recognizes that if this Court grants Qualcomm's motion on the grounds that Broadcom has failed to plead that Qualcomm's alleged conduct caused Broadcom any actual injury with respect to its state law claims, that ruling might implicate the viability of Broadcom's federal antitrust claims on grounds that were not argued or considered in the dismissal of the First Amended Complaint or addressed by the Third Circuit. Thus, while Qualcomm does not presently move against the federal claims on grounds of lack of subject matter jurisdiction, Qualcomm reserves the right to do so at a later time, as appropriate. See Fed. R. Civ. Pro. Rule 12(h)(3). 5
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Article III case or controversy requirements in holding that plaintiff failed to plead injury-in-fact under the UCL). And the California Supreme Court has made clear that California courts, absent discrete legislative authority, can adjudicate only actual cases or controversies and not simply matters of speculative injury. See, e.g., Angelucci v. Century Super Club, 41 Cal. 4th 160, 175 (2007) ("in order to have standing, the plaintiff must be able to allege injury -- that is, some `invasion of the plaintiff's legally protected interests'") (internal citations omitted); 5 Witkin Cal. Proc. 4th § 862 (to have standing plaintiffs must either "show[] an invasion of [its] legally protected interests" or plead a statutory grant to pursue the cause of action absent injury). Since Broadcom fails to meet the requirements of Article III, it likewise lacks standing to pursue its claims in a California state court. As discussed further below, Broadcom does not sufficiently allege injury and/or causation under any of these tests. 1. FRAND Licensing Theory

Broadcom complains that Qualcomm allegedly made commitments to certain SDOs to license certain of its patents, yet subsequently failed to provide such a license to Broadcom. (E.g., ¶¶ 7, 108, 166-68, 245-46.) However, if a patent is not actually essential to a standard, then standard-compliant products may be made, used and sold without infringing that patent. Broadcom admits as much in the SAC. (See, e.g., ¶¶ 5, 20.) Despite this admission Broadcom does not allege that it could not make or sell any standard-compliant products without infringing one or more Qualcomm patents. Indeed, Broadcom does not identify a single specific patent to which it claims it is entitled to a FRAND license in connection with the development of a specific standard. Broadcom does not allege that it did not or could not offer to make or sell any product as a result of its inability to obtain a license from Qualcomm. Broadcom also does not assert that it has been forced to pay anything 6
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to anyone, including Qualcomm, as a result of Qualcomm's purported behavior, whether for a license or for any other reason. Broadcom does not identify a single lost sale resulting from Qualcomm's alleged conduct. Although Broadcom alleges that Qualcomm asserted that Broadcom does not have a license for Qualcomm's patents (¶¶ 104, 117, 161), and vaguely claims that Qualcomm's purported conduct reduced Broadcom's "ability" to develop, market and sell products that comply with the relevant standards (¶¶ 105-106, 120, 162-163), Broadcom neither identifies such products nor describes how Qualcomm's alleged conduct affected those products. At most, Broadcom alleges that it may have been damaged by Qualcomm's actions because Qualcomm's technology might be essential to a standard that Broadcom's products practice. (See, e.g., ¶ 81 (describing Qualcomm's obligation as a duty to disclose "all IPR that [it] believe[s] might be essential to standards under consideration")); (¶ 67 (alleging that Qualcomm's alleged actions have created a situation where "a manufacturer may be unable to meet" its delivery obligations)); (¶ 304 (describing Broadcom as a "potential licensee[]" of Qualcomm's) (emphasis added).) But such claims are precisely the type of speculative injury allegations found by California courts to be insufficient to support a cause of action. See, e.g., McDonald v. John P. Scripps Newspaper, 210 Cal. App. 3d 100, 104 (1989) ("It is fundamental that damages which are speculative, remote, imaginary, contingent, or merely possible cannot serve as a legal basis for recovery"); 23 Cal. Jur. 3d Damages § 31 ("Damages that are uncertain, contingent, or speculative cannot be recovered either in actions ex contractu or in actions ex delicto."); see also Ferguson v. Lieff, Cabraser, Heimann & Bernstein, 30 Cal. 4th 1037, 1048 (2003) ("[T]he mere possibility or even probability that damage will result from wrongful conduct does not render it actionable.") (internal citations omitted). 7
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Similarly, federal courts have consistently held that such injury allegations are insufficient as a matter of law. See, e.g., Landes v. Tartaglione, No. Civ. A. 04-3163, 2004 WL 2415074, at *3 (E.D. Pa. Oct. 28, 2004) ("Plaintiff's reliance on the terms `if' and `may' to couch her allegations of harm is a clear indication that the harm she alleges is merely speculative."); Danvers Motor Co., Inc. v. Ford Motor Co., 186 F. Supp. 2d 530, 537-38 (D.N.J. 2000) (dismissing plaintiff's claim for lack of Article III standing and holding that plaintiff's claimed injury was too speculative because the complaint employed such terms as "may" or "predictably"); see also Storino, 322 F.3d at 296-98 (noting that "one cannot describe how the [plaintiffs] will be injured without beginning the explanation with the word `if'" and affirming dismissal of the complaint where the court could envision several scenarios where plaintiffs could avoid injury); SunCom Mobile v. FCC, 87 F.3d 1386, 1388 (D.C. Cir. 1996) (no concrete or probable harm where plaintiff did not allege an "existing interest" in licenses but only a mere "intent to purchase unidentified licenses sometime in the future"). 2. Patent Disclosure Theory

According to Broadcom's patent disclosure theory, Qualcomm deprived certain SDOs of the opportunity to work around Qualcomm's potentially essential patents by disclosing the existence of such patents to the SDOs later than it should have. (E.g., ¶¶ 96-97, 144-148, 197.) It is axiomatic, however, that Broadcom cannot have suffered injury under this theory unless Qualcomm's allegedly untimely disclosure actually caused the SDOs to incorporate Qualcomm's IP into the standard. Broadcom alleges that timely disclosure is necessary to mitigate the risk of a patent "hold-up" and that "SDOs often require patent holders to disclose their essential intellectual property". (¶ 5.) But, even under Broadcom's characterization, if a patent is not in fact essential for building standard-compliant products, then its "untimely"

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disclosure logically cannot affect a company's ability to build to the standard and cannot cause injury to a company. Tellingly, Broadcom fails to allege that any of Qualcomm's patents actually is essential to any standard at issue; that any standard actually contains Qualcomm IP; and that, but for the timing of Qualcomm's patent disclosures, those standards would not contain such technology. Broadcom also fails to allege that there were technologically feasible alternatives that would have been selected in lieu of Qualcomm's patented technology but for Qualcomm's purportedly delayed disclosure. The absence of such allegations is fatal to Broadcom's state law claims to the extent they are based on the patent disclosure theory. Broadcom merely asserts that because of Qualcomm's supposedly belated disclosure of its patents, SDO participants "were unable to consider the impact of Qualcomm's asserted patent rights in formulating" various standards, which in some unspecified manner "distorted the process," the outcome of which was the adoption of standards "that Qualcomm now claims read on its patents." (See, e.g., ¶¶ 96, 146.) But Broadcom fails to assert that any relevant standard actually would have differed had Qualcomm disclosed its patents any sooner than it did. Without this straightforward allegation, Broadcom's claim must fail. Indeed, as stated by the court in Lee v. Am. Express Travel Related Svcs., No. C 07-04765, 2007 WL 4287557 (N.D. Cal. Dec. 6, 2007), an injury causation theory regarding contract terms that exist but have not yet been triggered "rests on hypothetical assumptions about what may or may not transpire" and is insufficient as a matter of law to sustain a contract claim. Id. at *3, 5. 3. 802.20 Theory

Broadcom also claims to have been injured by Qualcomm's alleged "manipulation" of the IEEE 802.20 working group and the working group's subsequent suspension. (¶ 268.) However, Broadcom never alleges a causal connection between suspension 9
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of the working group and injury to Broadcom from its purported inability to develop 802.20compliant products. Broadcom does not allege, for example, that but for the suspension of the working group, the 802.20 working group would have agreed on a standard, what that standard would have been or how the standard would relate to hypothetical Broadcom products. Broadcom's claim -- that it was harmed by lost opportunities to sell non-existent unidentified products that comply with a non-existent 4G standard (see ¶ 247) -- cannot stand. As this Court and the Third Circuit have already held, Qualcomm cannot have injured Broadcom in the 4G area -- an area which is not yet developed and in which Broadcom holds no stake. See Broadcom v. Qualcomm, 501 F.3d 297, 322 (3d Cir. 2007) (affirming the relevant part of this Court's decision and stating that "as a manufacturer of equipment that may require a license from a firm possessing monopoly power in the B3G and 4G technology markets," Broadcom's injury is "too speculative" to be redressed) (emphasis in original). Broadcom once again claims injury in a future technology that has no standard or demand and in which Broadcom has no product. (¶ 268.) The requirement that Broadcom plead injury and causation and the prior decisions in this case require dismissal of Broadcom's IEEE 802.20 claims to the extent they are based on the 802.20 theory. B. Broadcom's State Law Claims are Unripe for Adjudication A plaintiff must establish that its causes of action are ripe for adjudication. See, e.g., Penn. Family Inst. v. Black, 489 F.3d 156, 165 (3d Cir. 2007); Pac. Legal Found. v. Cal. Coastal Comm'n, 33 Cal. 3d 158, 169-70 (1982). Standing and ripeness are integrally related doctrines, following similar lines of inquiry. See, e.g., Penn. Family Inst., 489 F.3d at 165; 13A Wright & Miller, Federal Practice and Procedure §§ 3532-3532.1 (noting similarity of standing and ripeness inquiries and stating that the central concern of a ripeness determination "is whether the case involves uncertain or contingent future events that may not occur as anticipated, or 10
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indeed may not occur at all"). In determining whether a matter is ripe for adjudication a court should look to (1) the fitness of the issues for judicial decision and (2) the hardship to the parties of withholding consideration. See Philadelphia Fed. of Teachers v. Ridge, 150 F.3d 319, 322-23 (3d Cir. 1998). Whether a claim is fit for review implicates factors such as whether the claim involves uncertain contingencies, the adversity of the parties and the possibility of later factual development. Id. Furthermore, in determining ripeness, courts also examine the conclusivity of a judgment. See Step-Saver Data Sys. v. Wyse Tech., 912 F.2d 643, 648-49 (3d Cir. 1990). Broadcom's state law claims are unripe because they rely on an uncertain contingency of possible future harm. Broadcom alleges only that Qualcomm's patents are "purportedly" or "potentially" essential to a standard. However, any injury Broadcom might suffer in making standard-compliant products will arise only if Qualcomm's "purportedly" essential patents are later established to be actually essential to the standard. This potential contingency is insufficient to create a ripe case or controversy under federal law. See, e.g., Armstrong World Indus. v. Adams, 961 F.2d 405, 413 (3d Cir. 1992) (holding matter unripe where plaintiff's complaint was based on a triggering contingent event that had not yet occurred); S.C. Johnson & Son v. Dowbrands, Inc., 167 F. Supp. 2d 657, 668-69 (D. Del. 2001) (where contractual provision was triggered by a finding of infringement and only the possibility of a future infringement finding existed, claim was unripe for adjudication); SWT Acquisition Corp. v. TW Svcs, Inc., 700 F. Supp. 1323, 1329-30 (D. Del. 1988) (dismissing as unripe plaintiff's claims with respect to a specific statutory provision where event triggering at-issue provisions was not alleged to have occurred and describing as improper plaintiff's request that the court "hypothesize as to what might happen if [the triggering event] commenced") (emphasis in original). The result would be the same under California law. See Pac. Legal Found., 33 Cal. 11
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3d at 174 (affirming dismissal of a claim of injury as insufficiently concrete where "plaintiffs' claim of injury depends for its urgency on the supposition that some of [the plaintiffs] will in the future" be frustrated). Broadcom's state law claims are also unripe because, even if this Court were to grant Broadcom the relief it seeks, the judgment of this Court would not be conclusive and would amount to an advisory opinion. Unless Qualcomm's patents actually are essential to a standard -- something that Broadcom conspicuously does not plead and a determination that Broadcom has not asked this Court to make -- then Broadcom, upon prevailing, would be in no better position with respect to manufacturing standard-compliant products than it is today. As noted above, standard-compliant products may be developed and sold without incorporating technology that is not essential to the standard. Indeed, unless actual essentiality is alleged with respect to defined patents in this case, this Court will find itself in the position of having expended significant effort in rendering a final judgment that could be effective only after another series of lawsuits determines the patents that actually are essential to a given standard. Thus, for example, if this Court were to accept Broadcom's position that Qualcomm has not been offering FRAND licensing terms with respect to a given standard, another court will have to engage in the rigorous determination of what patents actually are essential to the standard to delineate the scope of Qualcomm's alleged FRAND obligations. Some of these patents might be found not to be essential. Accordingly, Broadcom must at a minimum plead actual essentiality with respect to the Qualcomm patents it contends were not timely disclosed or the subject of a FRAND license offer by Qualcomm, which Broadcom has not done. See, e.g., Step-Saver, 912 F.2d at 648 (where court's determination on a claim would not have practical effect absent further litigation by other courts, claim was unripe for adjudication); S.C. Johnson, 167 F. Supp. 12
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2d at 668-69 ("until the infringement is established, and the [other] court announces its bases of [] decision, it is difficult for the Court to make a declaration of rights in this case, and determine what remedies, if any, are implicated"). II. BROADCOM ALSO FAILS TO PLEAD OTHER ESSENTIAL ELEMENTS OF EACH OF ITS STATE LAW CLAIMS Each of Broadcom's state law claims also fails because Broadcom does not allege other necessary elements of each claim. A. Broadcom Does Not Adequately Plead a Claim for Breach of Contract 1. Generally

Broadcom does not plead a contract directly with Qualcomm. Instead Broadcom alleges it is a third-party beneficiary of Qualcomm's alleged contractual commitments to various SDOs under its various theories. (E.g., ¶¶ 289-96.) To the extent that Broadcom's breach of contract claim is based on its patent disclosure and 802.20 theories, the claim for breach of contract should be dismissed because Broadcom fails to plead adequately that it is a third-party beneficiary of any of these contracts.5 Under California law, third parties may enforce contracts to which they are not parties only if those contracts are made "expressly" for their benefit. Cal. Civ. Code § 1559. "`Expressly' means in an express manner; in direct or unmistakable terms; explicitly; definitively; directly." Sofias v. Bank of Am., 172 Cal. App. 3d 583, 587 (1985) (citation omitted). If there is any doubt about whether the contract was made for the benefit of a third party, the contract should be construed against such intent. Van Deerhoof v. Chambon, 121 Cal. App. 118, 131 (1932). Under this standard, it is clear that Broadcom's SAC is inadequate.
5

Qualcomm does not make this argument with respect to Broadcom's breach of contract claim to the extent that claim relies on Broadcom's FRAND licensing theory. 13
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The excerpts related to IP disclosure from the alleged contracts that Broadcom cites to do not demonstrate any intent -- express or not -- to benefit third parties. See (¶ 80) (ETSI policy requiring IPR disclosure); (¶¶ 185-90) (JVT's Internal Operating Rules requiring IPR disclosure). For example, Section 4.1 of the ETSI Intellectual Property Rights Policy is cited as stating: "Each MEMBER shall use its reasonable endeavors to timely inform ETSI of ESSENTIAL IPRs it becomes aware of." (¶ 80.) Neither this contract term nor the other allegations of the SAC supports an interpretation that this clause was intended to benefit Broadcom and other third parties that implement a standard developed by ETSI, and certainly not that it does so "expressly". Therefore, Broadcom's breach of contract claim should be dismissed. See Johnson v. Holmes Tuttle Lincoln-Mercury, Inc., 160 Cal. App. 2d 290, 297 (1958) (holding that while it is not necessary that a third party be named and identified as an individual, the intent to benefit a third person must be established by the terms of the contract). Similarly, Broadcom's attempt to enforce Qualcomm's alleged commitment to IEEE related to the disclosure of financial relationships fails. According to the SAC, "the Policies and Procedures of IEEE Project 802, Working Group 802.20 and [its parent SDO] rules require that participants provide `[t]imely and adequate notice' of `all known directly and materially affected interest' including the `affiliation' of each member". (¶ 252.) Again, neither this contract term nor Broadcom's SAC supports a conclusion that the clause was intended to benefit Broadcom and other third parties. As a result, Broadcom's breach of contract claim should be dismissed to the extent it is based on Broadcom's patent disclosure or 802.20 theories. 2. Additional Deficiencies for Claims Based on Commitments to ATIS or ARIB

Finally, to the extent that Broadcom attempts to state a claim for breach of contract with respect to Qualcomm's alleged contractual commitments to ATIS or ARIB (¶ 290), 14
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Broadcom's allegations are woefully insufficient. Broadcom attempts, albeit unsuccessfully, to allege violations of commitments to ETSI and JVT. In contrast, Broadcom does not even attempt to make substantive allegations with respect ATIS or ARIB. For example, the SAC contains no specific allegation about formation of a contract with either ATIS or ARIB and Broadcom never alleges that it is a third-party beneficiary of any such alleged contract. This is an independent and additional reason requiring dismissal of claims that Qualcomm breached commitments to ATIS and ARIB.6 B. Broadcom Does Not Adequately Plead a Claim for Promissory Estoppel Broadcom alleges that Qualcomm made promises to it, through its promises to various SDOs, that Qualcomm would disclose possibly essential IPR and license its essential IPR on FRAND terms and that Broadcom oriented its chipset business in reliance on these promises. (E.g., ¶¶ 303, 305.) Broadcom's claim for promissory estoppel should be dismissed because Broadcom fails to plead reliance on Qualcomm's alleged promise. Under California law, a claim for promissory estoppel has four elements: (1) a clear and definite promise which the promisor should reasonably expect to induce an action or forbearance; (2) actual reliance on that promise; (3) substantial detriment as a result of that reliance and (4) damages measured by the extent of the obligation assumed and not performed. Toscano v. Greene Music, 124 Cal. App. 4th 685, 692 (2004). To plead reliance, the plaintiff must allege facts that demonstrate the act or forbearance. Smith v. City & Cty. of San Francisco, 225 Cal. App. 3d 38, 48 (1990). To establish reliance, Broadcom must allege that it took actions

6

Broadcom's other state law claims relating to Qualcomm's alleged conduct with respect to ATIS or ARIB are similarly insufficient because of a lack of any substantive allegations relating to ATIS and ARIB. 15
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in reliance on Qualcomm's alleged promise to license its purportedly essential patents on FRAND terms and Qualcomm's alleged promise to disclose its patents in a timely fashion. Broadcom's only attempt to plead reliance is its conclusory statement that it took "action to orient various aspects of its chipset business in reliance on Qualcomm's promises" (¶ 305.) This is insufficient. For example, in Smith, the plaintiffs alleged they "justifiably and reasonably relied upon the City's promises". 225 Cal. App. 3d at 48. The court sustained a demurrer on the grounds that "other than [the plaintiffs'] conclusory allegation that they reasonably and justifiably relied on the City's promises, [plaintiffs] allege no facts demonstrating such reliance. No facts are alleged which show that [plaintiffs] changed their position in any way because of what they had been promised by the City". Id. Like the claim in Smith, Broadcom's claim is based on a mere conclusion and, as in Smith, that claim should be rejected. C. Broadcom Does Not Adequately Plead a Claim for Tortious Interference with Prospective Economic Advantage To state a claim for tortious interference with prospective economic advantage under California law, a plaintiff must identify specifically the customers or prospective economic relationships with which the defendant allegedly interfered. See, e.g., AccuImage Diagnostics Corp. v. TeraRecon, Inc., 260 F. Supp. 2d 941, 956-57 (N.D. Cal. 2003) (dismissing interference claims because plaintiff's "conclusory" allegations that unspecified contracts and economic relationships existed with unspecified third parties were insufficient to provide required notice to the defendant about the nature of the claim); Westside Center Assocs. v. Safeway Stores 23 Inc., 42 Cal. App. 4th 507, 524 (1996) (finding that a plaintiff must prove an existing relationship with an identifiable buyer). Although Broadcom alleges that Qualcomm's conduct foreclosed Broadcom from commercial opportunities in chipsets based on the standards at issue and interfered with Broadcom's economic relationships with manufacturers (e.g., ¶¶ 162, 238, 298), 16
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Broadcom has not identified a single customer relationship or prospective economic relationship with which Qualcomm's actions allegedly interfered. This is a fatal defect.7 D. Broadcom Does Not Adequately Plead a Claim for Fraud Broadcom's claim for fraud should be dismissed because (1) Broadcom does not comply with the heightened pleading standard of Rule 9(b); and (2) Broadcom does not plead reliance on Qualcomm's alleged omissions.8 Allegations of fraud must be pled with particularity. Fed. R. Civ. P. 9(b). To satisfy Rule 9(b), a plaintiff must plead "the date, place or time of the fraud, or through alternative means of injecting precision and some measure of substantiation into their allegations of fraud". Lum v. Bank of Am., 361 F.3d 217, 224 (3d Cir. 2004) (citation and internal quotations omitted). In addition, a plaintiff must allege who made the misrepresentation, to whom it was made and the general content of the misrepresentation. Id. The SAC fails to satisfy Rule 9(b)'s heightened pleading standard because the alleged misrepresentation, reliance and damages elements of a fraud claim are not pled with particularity.

7

See In re Global Crossing, Ltd. Sec. Litig., No. 02-910, 2004 WL 725969, at *5 (S.D.N.Y. Apr. 2, 2004) (dismissing interference claim where plaintiff "ha[d] not identified any specific economic opportunity with which defendants interfered" and noting that "California courts have insisted that to establish interference with prospective economic advantage, a plaintiff must specifically allege a relationship with a particular third party") (emphasis added); Bradley v. Google, Inc., No. 06-05289, 2006 WL 3798134, at *4 (N.D. Cal. Dec. 22, 2006) (holding that tortious interference claim fails as a matter of California law where the plaintiff "never identifie[s] any of the third parties" with whom defendant interfered); Brown v. Allstate Ins. Co., 17 F. Supp. 2d 1134, 1140 (S.D. Cal. 1998) (dismissing tortious interference claim because "[p]laintiff fail[ed] to identify any specific existing relationships with which [defendant] tortiously interfered"). 8 California law recognizes three different types of fraud -- common law fraud, actual fraud, and constructive fraud -- each with different elements. See Masters v. San Bernardino County Employees Retirement Ass'n, 32 Cal. App. 4th 30, 40-42 (1995). Broadcom does not allege a particular type of fraud. Qualcomm assumes here that Broadcom attempts to allege a common law fraud claim. 17
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First, Broadcom has failed to plead that Qualcomm made a misrepresentation or omission with sufficient particularity. For example, while Broadcom alleges a general obligation to disclose patents, Broadcom does not plead the requisite date, place or time, or any other facts that would add precision and substantiation to its allegations. Instead, Broadcom offers a period of several years in duration for each of the relevant standards and fails to specify the particular patents that it claims should have been disclosed. Similarly, Broadcom alleges that Qualcomm had an obligation to disclose its affiliations with members of the IEEE 802.20 working group (¶¶ 253-54), but fails to identify any specific affiliations between Qualcomm and members of the IEEE 802.20, the specific dates and times at which such disclosures were supposed to be made or the form and content of such disclosures. Second, Broadcom also fails to plead reliance with sufficient particularity. Broadcom only generally asserts it "reasonably relied" (¶ 152) on the fact that SDO members would abide by the policies of those respective organizations, but fails to plead any particular facts to support this conclusion, such as specific actions it took as a result of such reliance. In order to state a cause of action for fraud, plaintiffs must plead actual reliance. Mirkin v. Wasserman, 5 Cal. 4th 1082, 1092 (1993). Actual reliance exists when "the defendant's misrepresentation is an immediate cause of the plaintiff's conduct, altering his legal relations, and when, absent such representation, the plaintiff would not, in all reasonable probability, have entered into the transaction". Cadlo v. Owens-Illinois, Inc., 125 Cal. App. 4th 513, 519 (2004). Similarly, in an action for fraudulent concealment, reliance requires that "the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact". Linear Tech. Corp. v. Applied Mat., Inc., 152 Cal. App. 4th 115, 131 (2007).

18
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Under either theory, Broadcom's general allegations are not sufficient. Broadcom has not alleged any actions that it took, specifically or not, in reliance upon Qualcomm's alleged omissions. Broadcom does not allege that it would have behaved differently had it been aware of Qualcomm's IP. Nor does it allege that any standards would have been different absent Qualcomm's alleged fraudulent concealment. Likewise, it fails to allege that it would have acted differently absent Qualcomm's alleged fraudulent concealment. In all, Broadcom has not pled the element of reliance. E. Broadcom Cannot State a Claim Under the UCL Broadcom's claims under section 17200 of the California Business and Professions Code (the "UCL") should be dismissed because Broadcom has not alleged the required statutory elements of standing, and also because Broadcom has not satisfied specific requirements applicable to the "unlawful" and "fraudulent" prongs of the UCL. 1. Broadcom Lacks Standing Under the Express Terms of the UCL

"California law previously authorized any person acting for the general public to sue for relief from unfair competition. After Proposition 64, which the voters approved [in November 2004,] a private person has standing to sue only if he or she `has suffered injury in fact and has lost money or property as a result of such unfair competition.'" Californians for Disability Rights v. Mervyn's, LLC, 39 Cal. 4th 223, 227 (2006); Daro v. Superior Court, 151 Cal. App. 4th 1079, 1097-98 (2007). Thus, a private plaintiff asserting a claim under the UCL now must plead and prove three elements to establish standing: injury in fact, that the plaintiff lost money or property, and causation. Cal. Bus. & Prof. Code § 17204. Broadcom has not adequately alleged injury in fact for the reasons discussed above. See Buckland v. Threshold Enters., Ltd., 155 Cal. App. 4th 798, 814 (2007) (finding that the "injury in fact" requirement of UCL means that the plaintiff has suffered "an invasion of a legally protected interest which is (a) 19
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concrete and particularized; and (b) actual or imminent, not conjectural or hypothetical") (citations and internal quotations omitted). Broadcom also lacks standing based on its failure to satisfy the element of "lost money or property". To meet that requirement, Broadcom must allege that it lost money or property as to which it had a vested interest, and that such money or property was lost to Qualcomm. See Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1148-49 (2003). As the California Supreme Court has stated, money damages were unavailable under the UCL even prior to Proposition 64. See Mervyn's, 39 Cal. 4th at 232. The only available monetary remedy under the UCL is restitution, defined as the return of monies taken by the defendant from the plaintiff. Id. Recent appellate authority confirms that the analysis of the "lost money or property" element of UCL standing is identical to the analysis of entitlement to restitution under the UCL, and that the same standing requirement applies even if only injunctive relief is sought. See Buckland, 155 Cal. App. 4th at 817-18. Because remedies under the UCL "are restricted to injunctive relief and restitution, the import of the requirement is to limit standing to individuals who suffer losses of money or property that are eligible for restitution". Id. at 817. Here, Broadcom does not allege it has paid anything to Qualcomm -- directly or indirectly -- or that it has lost anything in which it had a vested interest. Those omissions are fatal. Broadcom alleges only that Qualcomm's conduct has caused Broadcom to lose unspecified sales it otherwise would have made, resulting in "the loss of past, present, and future profits, by the loss of customers and potential customers, and by the loss of goodwill and product image". (¶ 327.) The California Supreme Court, however, has squarely held that lost sales or profits are not recoverable under the UCL because a party does not have a vested interest in such

20
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monies. Korea Supply, 29 Cal. 4th at 1148-50. Broadcom thus lacks standing to prosecute its claim under the UCL.9 2. Broadcom Fails to State a Claim Under the "Unlawful" or "Fraudulent" Prongs of the UCL

Broadcom also has not satisfied the pleading requirements applicable to the "unlawful" and "fraudulent" prongs of the UCL.10 Thus, those two prongs of Broadcom's UCL claim should be dismissed for the following additional reasons. a. The "Unlawful" Prong of the UCL

"The `unlawful' act prong of the UCL embraces `anything that can properly be called a business practice and that at the same time is forbidden by law'. Thus, the UCL `borrows' violations of other laws and makes them independently actionable as unfair competition practices." Daro, 151 Cal. App. 4th at 1093 (citations omitted). Broadcom contends that Qualcomm committed unlawful business acts or practices by breaching the contracts between Qualcomm and the various SDOs. (¶¶ 320-21.) However, common law claims -- including breach of contract -- do not "serve as a predicate act under the unlawful prong". Hartless v. Clorox Co., No. 06CV2705, 2007 WL 3245260, at *5 & n.5 (S.D. Cal. Nov. 2, 2007) (reviewing "the case authority in this area" and concluding that common law claims,

9

See also Reid v. Google, Inc., 155 Cal. App. 4th 1342, 1351-52 (2007) (finding that former employee lacked standing under UCL to seek return of unvested stock options, because plaintiff "at most had an expectancy interest in the options, [but] such interest does not constitute ownership" under the UCL); Jensen Enter. Inc. v. Oldcastle, Inc., No. 06-00247, 2006 WL 2583681, at *8 (N.D. Cal. Sept. 7, 2006) (UCL claim dismissed on the basis that plaintiff "alleges only damages -- i.e., that it lost sales and profits in the relevant market"). The additional forms of relief sought by Broadcom are not available under the UCL. Korea Supply, 29 Cal. 4th at 1148 ("[A]ttorneys fees and damages, including punitive damages, are not available under the UCL. . .".). 10 A third prong of the UCL is the "unfair" prong. 21
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including breach of contract and negligence, cannot serve as a predicate act under the unlawful prong). Accordingly, Broadcom's claim under the unlawful prong fails. b. The "Fraudulent" Prong of the UCL

In the UCL context, "fraudulent" is a term of art that refers only to practices that are likely to deceive the public, and not to common-law fraud. Olsen v. Breeze, Inc., 48 Cal. App. 4th 608, 618 (1996); see Daro, 151 Cal. App. 4th at 1099 n.9 (the "`essential test'" under the fraudulent prong is "`whether the public is likely to be deceived'") (internal citations omitted). However, "sophisticated companies" are not the "public" for UCL purposes. See, e.g., Linear Tech. Corp., 152 Cal. App. 4th at 135 ("where a UCL action is based on contracts not involving either the public in general or individual consumers who are parties to the contract, a corporate plaintiff may not rely on the UCL for the relief it seeks."); Rosenbluth Int'l, Inc. v. Superior Court, 101 Cal. App. 4th 1073, 1078 (2002). Broadcom does not allege any deception of the public by Qualcomm. All of Qualcomm's challenged conduct involved dealings between Qualcomm and various SDOs; between Qualcomm and Broadcom; and between Qualcomm and various unnamed companies in the telecommunications industry. None of these organizations or entities constitutes the public for UCL purposes. Accordingly, Broadcom's claim under the fraudulent prong fails. III. BROADCOM'S CLAIMS BASED ON THE H.264 STANDARD SHOULD BE DISMISSED ON THE BASIS OF THE COMPULSORY COUNTERCLAIM RULE AND RES JUDICATA Paragraphs 170-246 of the SAC concern the H.264 video compression standard. The parties recently concluded a separate lawsuit involving the H.264 standard in which Broadcom asserted the identical patent disclosure theory in response to claims of patent infringement brought by Qualcomm. Qualcomm, Inc. v. Broadcom Corp., Case No. 05CV1958B (S.D. Cal.) ("the 1958 Action"). 22
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The 1958 Action was commenced by Qualcomm in October 2005. In September 2006, Broadcom served supplemental interrogatory responses in the 1958 Action, contending that "Qualcomm had an obligation to disclose the patents-in-suit to the JVT, prior to October 14, 2005" and that "Qualcomm did not do so". Broadcom asserted that "Qualcomm is barred by the doctrines of equitable estoppel, implied license by equitable estoppel, common law fraud, unclean hand[s], and breach of contract from asserting the patents-in-suit against Broadcom" (hereinafter the "JVT nondisclosure issue"). See O'Shaughnessy Decl. Ex. 2 (Broadcom's 2d Suppl. Resp. to 3d Set of Interrogs., dated 9/13/06, at 16 (Robertson Decl. in Support of Qualcomm's Mot. Summ. Adjud., dated 11/6/06, Ex. 3).11 In December 2006, the court, in response to Qualcomm's motion for summary judgment, permitted Broadcom to litigate the JVT nondisclosure issue as part