(By Balaseshan) U.S. chip maker Qualcomm Inc. (NASDAQ:QCOM) announced plans to modify its corporate structure, in order to provide even greater protection for its intellectual property portfolio.
The new corporate structure will feature the parent company, Qualcomm, which includes Qualcomm Technology Licensing Division (QTL) and corporate functions, as well as most of Qualcomm's patent portfolio.
The new structure will also feature a new 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, Qualcomm CDMA Technologies (QCT).
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.
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 QTL.
Qualcomm said it 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.
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'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.
QTI and its subsidiaries will have no rights to grant licenses or other rights to patents held by Qualcomm. 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.
QCOM closed Wednesday's regular session up 1.84% at $54.91. The stock has been trading between $45.98 and $68.87 for the past 52 weeks.