Nokia, Qualcomm settle all litigation, enter 15-year agreement

The financial structure of the settlement includes an up-front payment and on-going royalties payable to Qualcomm. Nokia has also agreed to assign ownership of a number of patents to Qualcomm, including patents declared as essential to WCDMA, GSM, and OFDMA.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 7/23/2008

Ending a bitter legal battle than spanned several continents, Nokia and Qualcomm today announced that they have entered into a 15-year agreement covering various standards including GSM, EDGE, CDMA, WCDMA, HSDPA, OFDM, WiMAX, and LTE.

In addition to the settlement of all litigation between the companies, Nokia will withdraw its complaint to the European Commission as part of the deal.

Under the terms of the agreement, Nokia has been granted a license under all Qualcomm's patents for use in its mobile devices and Nokia Siemens Networks infrastructure equipment. Further, Nokia has agreed not to use any of its patents directly against Qualcomm, allowing the competitor to integrate Nokia's technology into its chipsets.

Withholding specific details, the two companies said that the financial structure of the settlement includes an up-front payment and on-going royalties payable to Qualcomm. Nokia has also agreed to assign ownership of a number of patents to Qualcomm, including patents declared as essential to WCDMA, GSM, and OFDMA.

"We believe that this agreement is positive for the industry, enabling the market to benefit from innovation and new technologies," said Olli-Pekka Kallasvuo, CEO of Nokia, in a joint statement from the two companies this evening. "The positive financial impact of this agreement is within Nokia's original expectations and fully reflects our leading intellectual property and market positions."

Qualcomm’s CEO Paul E Jacobs also said he was satisfied with the agreement. "The terms of the new license agreement, including the financial and other value provided to Qualcomm, reflect our strong intellectual property position across many current and future generation technologies. This agreement paves the way for enhanced opportunities between the companies in a number of areas," Jacobs said in the statement.

The agreement comes after Nokia and Qualcomm were urged by a Delaware court in February to begin negotiating. Originally a case there, the arbitration spread to the ITC and overseas. The two wireless giants have been fighting over issues related to a 2001 patent-licensing agreement, which expired in April 2007.

While the agreement is a tremendous positive for Qualcomm, as Finland-based Nokia is the world’s top cell phone maker, the San Diego-based company is far from sending its lawyers home. Indeed, Qualcomm is locked in a court room battle with Broadcom concerning certain cell-phone power-conservation chips. Qualcomm was ordered by the US District Court for Northern California last year to stop selling phones with certain WCDMA and EV-DO chips by January 2009 because they were found to infringe three Broadcom patents. Qualcomm earlier this month again argued before judges that such phones must remain on the market to encourage competition and was supported in court by a number of companies that use the disputed technology including, Motorola, Blackberry maker RIM, Samsung, LG, , T-Mobile, AT&T, and Sprint Nextel. 

Separately, Qualcomm today announced June quarter financials with revenue of $2.8 billion up 19% year over year and 6% sequentially.

Nokia announced its quarterly results on July 17, with revenues of just more than $2 billion up 4% both sequentially and year over year. The company also reported that it shipped 122 million mobile devices, up 21% year on year and up 6% sequentially. Nokia estimated total industry June quarter worldwide mobile device shipments at 303 million units, up 15% year on year and up 3% sequentially.