Nokia Warns that Qualcomm Dispute Harms WCDMA Sales

Nokia has warned that its ongoing patent dispute with Qualcomm could be holding up the adoption of WCDMA devices and services. Speaking at a news conference in South Korea, Chief Technology Officer Tero Ojanpera warned that the dispute was leaving a door open for rival technologies such as WiMAX.

"This whole discussion might have an impact on 3G technology," he said, adding alternative technologies such as mobile WiMax were gaining momentum due to uncertainties surrounding the licenses." reported the Reuters news agency.

"3G is not about cheap price but about new capabilities," said Ojanpera, when asked by Reuters about its 3G phone pricing policy on the sidelines of the Seoul event. "It's not the first priority to have a cheap phone."

Nokia and Qualcomm have been stuck in legal battles for well over a year - but the activity increased after a licensing agreement expired last month, although Nokia has made an interim payment which Qualcomm is disputing.

Analysts estimate Nokia has paid Qualcomm around $500 million per year and now aims to get a better deal.

Sony Ericsson says Nokia-Qualcomm row major issue

Sony Ericsson (6758.T: Quote, Profile, Research(ERICb.ST: Quote, Profile, Research expects to see a major impact on the wireless industry from a bitter royalty battle between Nokia and Qualcomm, the head of the world's fourth largest cellphone maker said on Wednesday.

An important cross-licensing agreement over technology patents between U.S. chip firm Qualcomm (QCOM.O: Quote, Profile, Research and the world's largest handset maker Nokia (NOK1V.HE: Quote, Profile, Research expired partly last month, and their ongoing battle is worrying investors and the industry on both sides of the Atlantic.

"My thinking is that it is going to have quite a big impact on the industry as a whole," Sony Ericsson's head Miles Flint said at the Reuters Global Technology, Media and Telecoms Summit in Paris on Wednesday.

"If it was just a row between those two I think they might have settled it earlier. It goes quite deep," Flint said, but noted it was difficult to estimate the exact ways it would impact the sector.
The legal dispute between the two centers on Nokia's use of Qualcomm patents for 3G, a high-speed wireless technology, but it also has a bearing on Qualcomm's chips business, which according to Nokia uses many Nokia-patented technologies.

, has said it expects the two to reach agreement soon and before it hurts the whole industry.
The discussions over the agreement are continuing, Nokia said earlier this week.

"We continue to negotiate and continue to be desirous of a settlement," Nokia Chief Financial Officer Rick Simonson said earlier this week at the summit.

© Reuters 2007. All rights reserved.

Nokia Pays Qualcomm $20M for Licenses

Finnish telecommunications equipment maker Nokia Corp. Thursday said it will pay $20 million to chipset maker Qualcomm Inc. to cover patent licenses in the second-quarter of 2007.

The companies have been embroiled in a series of lawsuits against each other concerning intellectual property rights and patent infringements, but Nokia says Thursday's payment is unrelated to those disputes. It says it's willing to pay fees for this new license, which relates to the European Telecommunication Standardization Institute.

"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 Nokia Chief Financial Officer Rick Simonson.

Qualcomm said it filed an arbitration claim Thursday that would require Nokia to continue paying the same royalty rates as a 2001 licensing agreement if the two sides fail to renew the pact before it expires next week, April 9.

Lou Lupin, Qualcomm's general counsel, declined to say how much money it gets from Nokia but said $20 million is "a fraction."

"The amount, as far as we can tell, was picked out of the air," Lupin told The Associated Press.

Qualcomm's claim before the American Arbitration Association also seeks that Nokia be prevented from filing patent claims against its rival over a mobile phone standard known as CDMA, or code division multiple access.

Nokia signaled that it would be aggressively contesting the old patent license agreements with Qualcomm that are set to expire next week.

Nokia and Qualcomm have been embroiled in a number of intellectual property and licensing disputes over the last year and the companies are currently at loggerheads on how much Nokia should pay Qualcomm for using its code division multiple access, or CDMA, intellectual property in North America.

Richard Windsor, an analyst at Japanese investment bank Nomura, said Nokia has pulled of a "strategic master stroke" by doing this.

Windsor said the deal signals how much Nokia is willing to pay Qualcomm for royalties and by doing so, Nokia significantly reduces the risk of being found guilty of "willful infringement" in any patent lawsuits that follow with the San Diego-based chipset maker.

Willful infringement is something Nokia cannot afford as punitive damages could cost it as much as three times the existing royalty rate in damages, he says.

"By reducing this risk Nokia will be able to fight harder and hold out longer against the legal blanket bombing that we think is being prepared by Qualcomm," said Windsor.

Windsor added that the move lengthens considerably the wait Qualcomm might have to endure before it gets paid the royalties that are due to it.

Nokia argues that Qualcomm's patent portfolio applies predominantly to the United States and says it believes the U.S. chipmaker has very few patents in other countries where Nokia operates.

"When Qualcomm's early patents become paid-up and royalty-free on April 9, Qualcomm's share of all patents relevant to Nokia UMTS handsets will significantly decrease," said Nokia's Simonson Thursday.

On Tuesday, Qualcomm filed two more patent-infringement lawsuits against Espoo, Finland-based Nokia, which follow a pre-emptive strike by Nokia two weeks earlier, when it filed lawsuits in Germany and the Netherlands.

The crux of the dispute is Nokia's contention that it's not fair for Qualcomm to keep charging Nokia the same royalty rate for WCDMA handsets, the most popular variety for third-generation cell phones, as Qualcomm did in the existing agreement.

© 2007 The Associated Press