Seeking to mitigate the damage from an embarrassing legal battle, Qualcomm asked a federal appeals court here Tuesday to restore its rights to two video patents the cellphone chip maker forfeited last year when a judge ruled that the company engaged in gross misconduct.

The case, a face-off with rival Broadcom has been filled with drama.

During a trial in California, Qualcomm officials had denied their company had participated in a working group that was setting a common technology standard for compressing video signals.

But very late in the court proceedings, Qualcomm admitted that it withheld internal documents that contradicted its earlier testimony. The company, in fact, had participated in the group.

Qualcomm later turned over more than 200,000 additional pages of relevant documents to Broadcom.

Blasting the company's conduct, U.S. District Court Judge Rudi Brewster ordered Qualcomm to pay Broadcom's attorney fees - a price tag of $8.5 million. More importantly, Brewster found that Qualcomm intentionally hid the existence of its relevant patents from the standard-setting group, and he stripped the company's patent rights on those inventions.

A Washington D.C. attorney for Qualcomm, Carter Phillips of Sidley Austin, argued Tuesday that Brewster's penalty was excessive.

"This is an unprecedented remedy - and troublesome," Phillips told a three-judge panel of the U.S. Court of Appeals for the Federal Circuit.

Phillips said Brewster was incorrect in ruling that the company deceived the video-compression group.

Qualcomm, Phillips said, was under no obligation to disclose its patents to the committee.

"That should be the end of the story in this case," he said.

The legal saga started when Qualcomm asserted that Broadcom infringed its patents by making products that were compliant with the video compression standard.

Broadcom said in response that Qualcomm hid its patents from the standard-setting group in a bid to collect a windfall of royalties once the technology was finalized.

"It is an unprecedented fraud, and I don't use those words lightly," said Broadcom lawyer William Lee of Wilmer Cutler Pickering Hale and Dorr.

Broadcom has argued that Qualcomm was required to disclose its patents to give the working group the opportunity to make a choice: It could incorporate the patents into the video standard or it could work around them.

The video-compression technology is used in everything from mobile devices to DVD players.

The judges during Tuesday's hearing asking probing questions of both sides.

Judge Alan Lourie said Qualcomm had to know that its patents would be implicated by the technology working group, and he said Qualcomm's attorney deserved a "chutzpah award" for one of his legal arguments.

On the other hand, Lourie questioned whether the trial judge went too far in stripping Qualcomm's patent rights against the world. The better course, the judge suggested, might have been to strip Qualcomm's patent rights only in relation to the video-compression technology.

Tuesday's hearing focused only on Qualcomm's actions with the working group. The company has not challenged the trial judge's finding that it engaged in litigation misconduct.

 After the withheld documents came to light, Qualcomm's general counsel apologized to the trial court and later resigned. Six of Qualcomm's outside attorneys, meanwhile, were referred to the state bar for possible sanctions. Those proceedings are ongoing.

Tuesday's case is one of three patents fights between Qualcomm and Broadcom pending at the Federal Circuit.

Qualcomm shares recently rose $1.94, or 3.7%, to $54.81 while those of Broadcom were up 50 cents, or 2.1% to $24.75.

Source:Dow Jones