A law department as a billion-dollar profit center (Qualcomm)

The law department of chipmaker Qualcomm has elevated the term “profit center” to a prodigeous level. The revenue the law department and its outside counsel brought in from patent royalties in 2005 accounted for more than two-thirds of the company’s $2.3 billion in operating earnings. According to BusinessWeek, Oct. 30, 2006 at 75, Qualcomm has used its 1,800 patents for wireless devices to obtain payments — the magazine uses the trollish pejorative “extract outsize royalties” — from other companies on current and next-generation products.

All law departments would burst with pride if their efforts were associated with bringing in close to $1.5 billion in revenue.

For more on law departments as profit centers (See my posts of March 12, 2005 on a law department that funded its matter management system in return for reductions in reserves; Nov. 25, 2005 about whether law departments should manage settlement funds and recovered amounts; Feb. 8, 2006 on DuPont’s collection efforts; Nov. 28, 2005 and Feb. 16, 2006 on IP recoveries; March 15, 2006 on litigation recoveries; March 28, 2006 on EMC; March 17, 2006 on Autodesk; March 15, 2006 on insurance reimbursements; and June 15, 2006 on release of reserves; but May 19, 2006 on the problematic side of crediting recoveries.).