Nokia-Qualcomm Patent Battle Heats Up

Nokia, the world’s largest mobile handset maker, has been locked in an increasingly bitter patent battle with San Diego’s Qualcomm since 2005, with Nokia accusing Qualcomm of violating licensing regulations and Qualcomm accusing the phone maker of violating patents. And now comes news Nokia is paying $20 million to Qualcomm to continue licensing key patents…and says that if Qualcomm isn’t happy with that payment, it’ll be happy to go after Qualcomm for infringing its patents.

What?

It all started in October 2005, when Nokia and five other companies filed a compainted with the European telecom regulators, claiming Qualcomm’s patent licensing terms were stifling competition in the mobile phone market. Regulators are still pondering that complaint, but Qualcomm decided not to wait around and filed suit against Nokia in November 2005, alleging the Finnish company was violating 11 patents of its own, and one from Qualcomm subsidiary SnapTrak. In mid-2006, Qualcomm followed up with a patent violation suit against Nokia in a British court, and a complaint to the ITC that Nokia was infringing on six of its patents. In response, Nokia announces it will stop making CMDA handsets, withdrawing from a joint venture with Sanyo and reducing its exposure to Qualcomm’s patents. Then Nokia sues Qualcomm in August 2006, demanding a court order Qualcomm to license its GSM-related patents on “fair, reasonable, and non-discriminatory terms.”

Still with us? Flash forward to 2007: In February, a judge stays the complaint Qualcomm filed against Nokia with the ITU; in March, Nokia goes after Qualcomm again, this time in Germany and the Netherlands, asking courts to declare Qualcomm patents used in Texas Instruments chipsets as “exhausted”—meaning Nokia wouldn’t have to pay money to Qualcomm to use the chipsets in the European Union.

And this week, a new volley, with Qualcomm filing suit against Nokia over GSM patents and Nokia calling Qualcomm a “serial litigator.”

And today, Nokia has announced it is paying Qualcomm $20 million for the right to use UMTS patents after April 9, 2007. However, Nokia is quick to point out that the payment does not extend patent agreements on CDMA/WCDMA technology set to expire on April 9; instead, the payment represents “fair and reasonable” compensation for the use of selected Qualcomm patents in Nokia UMTS handsets during the second quarter of 2007, and the company expects it will make more payments to Qualcomm in the future, although those will be smaller once some of Qualcomm patents become “paid-up and royalty-free” on April 9.

What’s so sacred about the April 9 date? That’s when a patent agreement covering CDMA/WCMDA technology between the two companies is set to expire—and right now, it looks like there’s no hope of the companies reaching an agreement to extend the deal before it expires. According to Nokia, on that date Qualcomm’s “entire chipset business” will be exposed to Nokia’s own GSM, WCDMA, and CDMA patent collection&hellip:and if Qualcomm decides it wants to fire back, Nokia CFO Rick Simonson has a warning for the San Diego company: “Nokia will use all rights from those portfolios when defending itself against any new Qualcomm litigation.”

Tune in next week.

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