Nokia to pay Qualcomm US$20m in patents dispute

10 Apr 2007

The world’s biggest mobile manufacturer Nokia has agreed to pay US wireless technology firm Qualcomm US$20m to cover the use of patented UMTS (universal mobile telephone system) technology in Nokia handsets.

The move comes just days after Qualcomm filed a further two patent infringement suits against Nokia over the use of its GSM, GPRS and EDGE patented technology that centres on the downloading of applications and other digital content over wireless networks.

Qualcomm, a Fortune 500 company headquartered in San Diego, is considered a leader in the wireless technology space and has more than 5,700 patents filed in the US and has entered into more than 140 royalty-bearing license agreements.

In relation to the US$20m payment covering the use of its patented UMTS technology, Nokia said the payment refers to patents it licensed through the European Telecommunication Standardisation Institute (ETSI).

“As we continue to negotiate the new cross-license agreement, Nokia views this payment as fair and reasonable compensation for the use of relevant Qualcomm essential patents in Nokia UMTS handsets during the second quarter of 2007,” said Rick Simonson, chief financial officer with Nokia.

“Nokia believes that Qualcomm’s patent portfolio is concentrated in the US, and that it has few or no alleged UMTS patents in many of the countries in which Nokia has substantial UMTS handset sales.

“When Qualcomm’s early patents become paid-up and royalty-free on April 9, 2007, Qualcomm’s share of all patents relevant to Nokia UMTS handsets will significantly decrease,” Simonson added.

Nokia said the retained rights have significant value and it is well positioned to offset any claims Qualcomm may make against Nokia products.

“It is important to note that as of April 9, 2007, Qualcomm’s entire chipset business becomes exposed to Nokia’s extensive GSM, WCDMA and CDMA patent portfolios and Nokia will use all rights from those portfolios when defending itself against any new Qualcomm litigation,” Simonson stated.

By John Kennedy