Nokia and Qualcomm: The battle continues

Nokia Corp. and Qualcomm Inc. both insisted this week that they continue to talk, seeking only fair and reasonable terms in an agreement critical to both parties’ financial future, after their 2001 cross-licensing agreement expired at midnight on April 9.
Meanwhile, however, both parties continued to appeal to the court of public opinion. Over the past year, each side has attempted to position itself on the technical, legal and moral high ground with a succession of claims, charges and counter-arguments as they approached the agreement’s expiration.
The latest: Nokia said that Qualcomm is the single largest user of Nokia’s “essential” patents, which have contributed to industry standards. The Finnish handset maker “rejected” Qualcomm’s past statements to the contrary and reiterated its position that a $20 million payment to Qualcomm, announced last week, gave it the right to use Qualcomm’s “early patents” royalty free “in perpetuity.”
“Therefore, Nokia’s licensing agreements with Qualcomm for the future will focus only on the terms for Qualcomm’s newer patents,” the Finnish company said.
Qualcomm subsequently “rejected” Nokia’s $20 million “offer” and its terms, as well as Nokia’s assertions characterizing the 2001 agreement and its provisions.
“Both the amount of the payment and the terms that Nokia sought to unilaterally impose in connection with it are at odds with the parties’ 2001 license agreement,” Qualcomm said in a statement.
Nokia has stated that it has paid less than a 3 percent gross royalty rate to Qualcomm for W-CDMA handsets. Qualcomm retorted that if such a statement were true, then Nokia had “seriously underpaid” royalties owed to Qualcomm under the 2001 agreement-and it would address the “potential breach” through legal and contractual channels.
Nokia’s attempt to pay Qualcomm $20 million to settle what it considered certain elements of the 2001 agreement came on the heels of statements by Qualcomm’s CEO, Paul Jacobs, to the Financial Times on April 1, in which he said he hoped the two parties could avoid “Armageddon.” The biblical term refers to a climactic battle between “good” and “evil,” but in secular use in the cellular industry it appeared that Jacobs referred to an escalation in patent litigation.
In tangentially related news, Broadcom Corp., which has patent litigation pending with Qualcomm, filed another suit against Qualcomm in California Superior Court over allegations that Qualcomm’s conduct in setting industry standards violates California law.
A Qualcomm spokesperson said the company had not yet received the complaint from Broadcom and thus couldn’t comment.