Qualcomm, Nokia spar as CDMA deal reaches end
By Colleen Taylor, Contributing Editor -- EDN, April 6, 2007
The relationship remains tense between long-dueling wireless handset technology companies Qualcomm Inc. and Nokia Corp.
Qualcomm has said that Nokia's $20 million payment to it for the continued use of the company's CDMA-related patents through Q2 2007 is just not good enough. In a filing made Thursday with the AmericanArbitration Association, Qualcomm requested a ruling that Nokia's continued use of Qualcomm's patents in its CDMA cellular handsets after April 9 constitutes "an election by Nokia to extend its license under the parties' existing agreement."
For its part, Nokia asserted in a statement Thursday that what it called a "fair and reasonable" $20 million payment did not extend the old agreement. Instead, Nokia argued that the payment was based on the licenses that it said Qualcomm had agreed and provided through the European Telecommunication Standardization Institute (ETSI), and was therefore separate from the patents in the United States.
"Nokia believes that Qualcomm's patent portfolio is concentrated in the United States, and that it has few or no alleged UMTS patents in many of the countries in which Nokia has substantial UMTS handset sales," Rick Simonson, Nokia's CFO, said in a statement. Nokia added that it has until 2007 paid less than 3 percent cumulative license fees under all of its patent license agreements involving WCDMA products.
Qualcomm fired back Thursday, saying that Nokia's offer to "only pay a nominal amount" is evidence that Nokia does not intend to comply with the agreed-upon terms of the parties' existing agreement or to pay what Qualcomm said was a "fair and established price" for access to its patent portfolio.
"Nokia has no more right to unilaterally set a price than the average consumer has a right to walk into a store, take a product off the shelf, and walk out with it after leaving only a fraction of the established price on the counter," Qualcomm said in its statement. "Leaving some money on the counter does not make the act any less unlawful."
An extension like the one Qualcomm is pressing for would obligate Nokia to pay Qualcomm the same royalty specified in the current agreement and prohibit Nokia from asserting patent claims against Qualcomm's CDMA products. Qualcomm said it also seeks a ruling that it is entitled to terminate all of Nokia's rights and licenses under the agreement if Nokia sues Qualcomm for patent infringement after April 9.
Qualcomm and Nokia signed their current license agreement for CDMA products in July 2001. The agreement expires in part on April 9, with Nokia having a right to extend the agreement exercisable through the end of 2008. If the agreement is not extended beyond April 9, Qualcomm said, Nokia's rights to sell certain subscriber products under most of Qualcomm's patents will expire.
This is not the only current legal tussle between the two companies. Earlier this week, news surfaced that Qualcomm had filed suit against Nokia in U.S. District Court for the Eastern District of Texas, involving three patents, all of which were awarded last year. Qualcomm is claiming that Nokia infringed on three patents involving "handshaking" between wireless devices and a server, interactive screens and metadata filtering; Qualcomm seeks an injunction and damages.
