Qualcomm (QCOM) is one of the few large US companies that has been in a running dispute with its largest customer. The cell phone chip-set company has been feuding with Nokia (NOK) over licensing fees and intellectual property for over two years. Nokia has close to 40% of the global handset market, and Qualcomm’s license contract with the company expired on April 9.

Qualcomm has also been in legal disputes with Texas Instruments (TXN) that lead to a breach of contract suit by TI over a cross-licensing agreement.

Qualcomm has also insisted on pursuing its patent fight with rival Broadcom (BRCM) although several court decisions have been in Broadcom’s favor and analysts have been concerned that the battle between the two companies could cost QCOM in a case that has been pending with the U.S. International Trade Commission.

The willingness of Qualcomm’s management to gamble that it could win all or most of these disputes caught up with the company. The ITC ruled that cell phones with the company’s new chip-sets for 3G products could not be imported into the US. Current models can still be shipped. Broadcom had been asking for the action, and its got its way.

Now that the victory is secure, Broadcom says it is willing to come to the negotiating table. But, according to MarketWatch, Qualcomm will have none of it: Negotiations with Broadcom are impossible, Qualcomm general counsel Louis Lupin said, because "it has been the case since day one of our discussions that what they are seeking are terms that would be destructive to our business model."

But, much of the damage may have been done. Big US cellular companies like AT&T (T) Wireless and Verizon Wireless need the 3G products to keep up their earning momentum. Their success in wireless  has helped offset the loses their landline businesses have suffered to VoIP providers.

Verizon Wireless is so concerned about the effect of the ruling on its business that it has asked President Bush to veto the ITC ruling.

Qualcomm’s unwillingness to compromise with any of these rivals or customers has now hurt some of its most important constituents, the US cellular companies. And, it did not have to be that way. Qualcomm CEO Paul Jacobs, son of the company’s founder, has repeatedly said that his company must hang on to it current licensing model and intellectual property philosophy. What he does not add is that he is willing to do these things no matter what the cost is to his shareholders.

Mr. Jacobs must believe that his shareholders are boobs. But, they are not. Qualcomm’s stock has been held to a gain of a little above 10% over the last two years, while the S&P is up by over 25%.

Investors have been leery about Jacob’s riverboat gambling style. And, they have been right.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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