Nokia Corp. filed a complaint with the Delaware Court of Chancery over several matters relating to its disputes with Qualcomm Inc., the latest in a series of squabblings between the two companies.
The Nokia statement, though brief, raised a handful of issues regarding the conditions under which the two parties had struck their original cross-licensing agreement, subsequent legal sparring and ongoing efforts by both sides to win support in the court of public opinion.
Both sides clarified their positions relative to the Delaware court complaint shortly after Nokia’s filing, but neither provided much insight into whether the latest court filing would affect the negotiations between the two parties in their effort to renew a cross-licensing agreement that expires in April.
In a statement about its filing, Nokia said it asked the court to order Qualcomm to “abide by its written contractual obligations to international standards setting organizations to license intellectual property essential to GSM and UMTS technology standards on fair, reasonable and non-discriminatory (FRAND) terms.”
Nokia is seeking a court order “to affirm that Qualcomm is not entitled to injunctive relief in relation to alleged infringement of patents declared essential to a standard.”
Finally, Nokia said it asked the court “to affirm the key elements of FRAND, where the two companies have to-date have had differing views, to solidify a framework for future intellectual property licensing negotiations.”
Nokia said it is following the dispute resolution process laid out by the European Telecommunications Standardization Institute.
Bill Plummer, vice president for external affairs for Nokia in North America, wrote in an e-mail that the latest court complaint was largely based on ETSI standard-setting procedures that call for “fair, reasonable and non-discriminatory” terms in IPR licensing.
“Qualcomm entered into a written contractual obligation with ETSI to license Qualcomm IPR declared essential for use in a standard to ETSI members on FRAND terms,” Plummer wrote. “Qualcomm belatedly declared certain patents as essential after standards had been set and significant investments had already been made within the industry. Qualcomm violated its ETSI obligations by refusing to negotiate a FRAND license royalty for the use of declared essential IPR, but instead sought to exclude Nokia from using the IPR through court actions seeking injunctions and exclusionary relief.”
Plummer added: “Qualcomm has attempted to gain an unjustified advantage in negotiations by filing litigation that seeks injunctive or exclusionary relief.”
Nokia seeks a single forum to resolve its various disputes with Qualcomm, which has asked for injunctions against Nokia in three separate jurisdictions, Plummer wrote, thus the filing in a court in Delaware. Qualcomm-like many corporations-is incorporated in Delaware.
The two parties have two different views of FRAND, Plummer wrote, and “once FRAND terms are confirmed by the court, Qualcomm would be required to negotiate in good faith with Nokia under those terms.”
“We have not seen Nokia’s complaint yet,” said Qualcomm’s Jeremy James. “And we are anxious to demonstrate that our more than 130 licensing agreements-which were voluntarily entered into after good-faith negotiations-are in compliance with FRAND requirements. Our licensing program is broad and intended to foster competition throughout the industry. This is Nokia’s desperate attempt to have the judicial system change what Nokia has agreed to. And it appears from their press release that Nokia now accepts our position that we have essential patents in the GSM family of products, something they have vehemently denied in the past.”
Nokia’s filing is the latest salvo in a protracted dispute between the two companies, and the tone of the two parties’ remarks seems to indicate the two parties continue to jockey for position.
UBS analyst Maynard Ums wrote in a note to investors that the action seemed to reflect tactics in the negotiation process between the two parties.
“We believe a protracted litigation process does not benefit either party or the industry,” Um wrote in his investors’ note. “However, we think that this is a part of the ongoing negotiation process. … In the interim, we believe both parties will continue `business as usual.”‘
