Nokia and Qualcomm today announced that they’ve reached an agreement to settle all litigation between the companies. The new agreement covers various standards including GSM, EDGE, CDMA, WCDMA, HSDPA, OFDM, WiMax, LTE and other technologies, and will also see Nokia withdrawing its complaint to the European Commission.
Under the terms of the new 15 year agreement, Nokia has been granted a license under all Qualcomm’s patents for use in Nokia’s mobile devices and Nokia Siemens Networks infrastructure equipment. Further, Nokia has agreed not to use any of its patents directly against Qualcomm, enabling Qualcomm to integrate Nokia’s technology into Qualcomm’s chipsets. The financial structure of the settlement includes an up-front payment and on-going royalties payable to Qualcomm. Nokia has agreed to assign ownership of a number of patents to Qualcomm, including patents declared as essential to WCDMA, GSM and OFDMA. The specific terms are confidential.
Both parties seem satisfed. Nokia’s Olli-Pekka Kallasvuo sees the agreement positive for the industry, “enabling the market to benefit from innovation and new technologies.” Qualcomm’s Paul Jacobs is also pleased with the deal, adding that it “paves the way for enhanced opportunities between the companies in a number of areas.”
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Qualcomm and Nokia are set to go to battle in the US over hundreds of millions of dollars in potential royalty fees. This Wednesday, Qualcomm will argue in a Delaware court that Nokia owes them royalties on CDMA technology patents, with Nokia will defend their position that they’ve doled out over $1 billion in payments over the years and isn’t obligated to abide by the expired patent licensing deal.
The two companies are keeping a handful of other patent lawsuits on hold pending the results of this trial. The outcome of the Delaware trial will determine which side, Nokia or Qualcomm, is in the right.
Qualcomm claims that Nokia implicitly extended their patent-licensing deal upon is expiration in 1997. Nokia’s continued use of the patents are claimed to be grounds for an implied contract on the same licensing-terms that were originally inked in 1992.
Nokia, however, contends that they were free-and-clear of the licensing deal upon the expiration of the deal, and after paying over $1 billion in licensing fees. Furthermore, Nokia argues that Qualcomm’s patent holdings have decreased in value as the wireless industry has moved forward, and that Nokia should be allowed to have access to these patents.
“Essentially, we are seeking to prevent Qualcomm from imposing on Nokia the licensing terms of an old agreement contrary to the terms of that agreement and based on a vague allegation of use of patents that have never been identified,” said Nokia spokeswoman Laurie Armstrong.
Nokia is seen as being at a disadvantage in the face of industry precedent for Qualcomm’s demands for royalties. Qualcomm has secured royalty deals, amounting to 5% of a handset’s cost, from 90 other industry members. These deals could make it hard for Nokia to walk away from this trial without having to pay Qualcomm on each of their CDMA handsets. And, the trial’s outcome will likely have negative impacts on the outstanding lawsuits still in limbo on three different continents.
Source: Reuters
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