The Bush administration has refused to overturn a ban on imports of 3G phones using Qualcomm chips, but Qualcomm has vowed to appeal.
The US International Trade Commission imposed the ban after patent-infringement claims by rival chip-maker Broadcom. The ruling blocks some new phones using Qualcomm chips from being imported and sold in the US.
Qualcomm had asked the Bush administration, through US Trade Representative Susan Schwab, to reverse the ban. On Monday, the last day for a presidential veto, Schwab said the administration wouldn't act on Qualcomm's request.
Qualcomm said it will now turn to Court of Appeals. Last month, that court pushed back Qualcomm's appeal on a technicality, saying it couldn't rule on it until after the presidential review period.
Meanwhile, the company is working with handset makers and carriers on new software intended to minimise the impact of the ban, according to a Qualcomm statement.
In addition, Verizon Wireless has agreed to pay Broadcom $6 for every device it sells that uses the offending chips. Schwab's statement mentions that Broadcom has also made an agreement with a second, unnamed mobile operator.
Now that two operators have made agreements with Broadcom, others might follow, said Smith Brittingham, a lawyer with Finnegan, Henderson, Farabow, Garrett & Dunner and a former investigative attorney with the ITC. If they all pay for the technology, they each don't feel like they're paying for something that their competitors aren't, he said.
Broadcom welcomed Schwab's letting the ban stand.
"This decision strengthens the intellectual property rights of all US companies, not just Broadcom, and sends a clear message to all those who would seek to escape the consequences of their patent infringement," Broadcom said in a statement.