Qualcomm rejects Nokia's $20M CDMA deal offering
By Colleen Taylor, Contributing Editor -- EDN, April 12, 2007
Qualcomm Inc. announced Thursday that it has indeed rejected Nokia's $20 million payment offering for the continued use of Qualcomm's CDMA patent portfolio through Q2 2007, along with the accompanying terms upon which Nokia conditioned its payment.
Nokia offered the money as an advance payment of royalties to Qualcomm for Nokia's continued use of its CDMA patents through the quarter ending June 30, 2007. However, in a filing last week with the American Arbitration Association, Qualcomm brushed off the payment offering, and 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."
Qualcomm and Nokia signed a license agreement for CDMA products in July 2001, which expired in part on April 9. At the date of expiration, Nokia had a right to extend the agreement under the previously agreed-upon terms, exercisable through the end of 2008.
According to Qualcomm, both the $20 million payment and the terms proposed by Nokia are "at odds" with the parties' 2001 license agreement.
Qualcomm said Thursday that Nokia's attempted payment is "a fraction of the royalty" to which Nokia agreed in the arm's length negotiations leading to the parties' existing contract and for which Nokia bargained in obtaining the extension option. In addition, Qualcomm said, Nokia's attempted payment represents "only a small fraction" of the market-established value of Qualcomm's 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 last week in a statement. "Leaving some money on the counter does not make the act any less unlawful."
For its part, Nokia has pointed its finger back at Qualcomm and asserted that Qualcomm is in no place to be judgmental of Nokia as Qualcomm's products are equally dependent on using IP from other companies. In a statement made Friday, Nokia rejected Qualcomm's public statements that it does not use Nokia patents.
"Nokia has for the last fifteen years contributed its technology to industry standards, such as GSM, WCDMA and CDMA," Nokia said in a statement, adding that if Qualcomm's products indeed comply with industry standards, "it is in the same position as any other supplier of mobile technology in that it needs access to Nokia's patents covering standardized technologies."
Nokia said it believes that Qualcomm is currently using over one hundred of Nokia's GSM/WCDMA and CDMA2000 essential patents in its chipsets, and that Nokia and Qualcomm "are yet to agree" on the compensation payable by Qualcomm for such patents.
Currently, Qualcomm maintains that Nokia's rights to sell certain subscriber products under most of Qualcomm's patents is now expired.
