SAN DIEGO—Much ado about nothing, so far.
That sums up Qualcomm Inc.’s press release, issued today, crowing that the United States International Trade Commission had initiated an investigation of Nokia Corp. on Qualcomm’s June 9 complaint that the Finnish vendor is violating Qualcomm’s W-CDMA patents.
However, the impetus for the onerous-sounding “ITC investigation” is simply the receipt of a properly filed complaint, according to the ITC—nothing more.
The Qualcomm effort appears to be a public relations ploy to garner industry support and to keep Nokia under pressure as the two re-negotiate a cross-licensing agreement that expires in April 2007. The ITC investigation is merely one among several lawsuits or complaints launched by both parties at the other before trade authorities in both the U.S. and in Europe over both GSM and CDMA technology patents and royalty rates.
The news generated today by Qualcomm’s press release appears to have briefly sent Nokia shares down, after which they rebounded and at midday rested at $19.53, down 1 cent from the day’s opening value. Qualcomm’s share price initially rose before falling 27 cents to $37.73.
While appearing to be on the offensive with today’s press release, Qualcomm may well be following Napoleon’s well-known maxim for fighting from a defensive position: “attack, attack, attack.”
Qualcomm currently faces a European Commission investigation into a complaint filed last year by Nokia, L.M. Ericsson, NEC Corp., Texas Instruments Inc., Panasonic Mobile Communications and Broadcom Corp. alleging that Qualcomm is charging excessive royalties on its patents. News of the pending investigation prompted Paul Jacobs, Qualcomm’s chief executive officer, to suggest in an interview that he would consider breaking his company into two separate entities so that its IPR licensing business—and actions taken against it—would not affect its chip design and manufacturing business.
Broadcom and Texas Instruments, rival chipmakers to Qualcomm, also launched a complaint against Qualcomm in South Korea earlier this month, alleging that the latter is using its dominant market position to engage in unfair business practices. Qualcomm is now under investigation by Korean anti-trust authorities.
And last week, the first of a handful of suits between Broadcom and Qualcomm reached trial before the ITC over Broadcom’s assertion that Qualcomm’s chips infringe on Broadcom’s patents. A slew of wireless players, including Motorola Inc., Verizon Wireless, Sprint Nextel Corp., Samsung Electronics Co. Ltd. and others have taken Qualcomm’s side in that dispute, essentially arguing that even if Qualcomm does violate Broadcom’s patents, they should not be punished by a prohibition on offending chips. In that trial, an administrative law judge is set to make recommendations to the Commission next month.
