Both sides continue to insist they want fair play and respect, but Nokia Corp. and Qualcomm Inc. are still trading lawsuits and rhetorical barbs in pursuit of that lofty goal.
Last week’s countersuit by Nokia in a Texas court against Qualcomm alleged that the latter’s MediaFLO and BREW technologies were dependent on Nokia’s intellectual property, though Qualcomm said it was confident the charges were unfounded. The countersuit was in response to a Qualcomm lawsuit that alleged Nokia’s GSM phones were infringing on Qualcomm patents, which Nokia denied.
Meanwhile, both companies made top executives available to articulate their companies’ positions in both the recent GSM-based disputes as well as the months-old dispute over renewal of a broad cross-licensing agreement on CDMA and W-CDMA IPR that expired April 10.
Though neither side offered much substantive news, the exercise revealed new details on the legal maneuvering and rhetorical jousting on both sides.
Positional remarks
Rick Simonson, Nokia’s CFO, characterized Nokia’s countersuit and, indeed, its overall stance in the slew of disagreements with Qualcomm as defensive in nature-despite the fact that Nokia has initiated proceedings in a number of legal and regulatory venues around the world over the past year.
“This is a defensive action,” Simonson said of the Texas countersuit, before broadening the issue. “We’re responding to litigation launched by Qualcomm at Nokia in 11 places in the past 18 to 20 months. We’re confident we’re not in any violation of what they’ve alleged.”
Bill Sailer, senior vice president and legal counsel at Qualcomm, said his company would examine the countersuit’s allegations, but that he was comfortable the charges were unfounded.
“We suspect it’s because both MediaFLO and BREW are gaining traction,” Sailer said. “MediaFLO has a lot of advantages over DVB-H and Verizon [Wireless] has launched and AT&T [Mobility] will launch in the second half of this year. It’s appealing because it’s a technically superior product. I think Nokia is behind the curve and this is one way of going after us.”
Simonson disagreed, adding: “That’s people getting a little too clever by half.”
“The MediaFLO and BREW angles are interesting because, increasingly, more and more technologies are being put into mobile devices and solutions,” the Nokia CFO said. “Our point is that the landscape is changing and Qualcomm shouldn’t be able to dictate to the whole industry. It surprises people that something associated with Qualcomm-BREW and MediaFLO-in fact are using implementation IPR developed and owned by Nokia. That’s what’s happening with convergence and we want to defend our interests.”
“The industry shouldn’t be held hostage by anyone,” Simonson added. “It’s not our business model to corner the market, so to speak, on either essential IPR or implementation patents. That can retard innovation in the industry. We expect to be paid fairly for what we develop and we’ll pay fairly for the use of somebody else’s IPR.”
Simonson said Nokia is developing multiple technologies around mobile video and that DVB-H is only the most prominent-“a cost-effective, market-ready solution.”
“MediaFLO is only one of several technologies out there,” Simonson said. “But our strategy is not litigation-based. We just compete in the marketplace. We’re not going to court against the Japanese standard or the Korean standard or one of the Chinese standards. And it wouldn’t be any different with MediaFLO if it weren’t for the fact that we’re defending ourselves in 11 different legal actions.”
Coordinated response
Asked whether Nokia was using coordinated rhetoric by its CEO, CFO and CTO to broadly characterize its battles with Qualcomm in industrywide terms, rather than as disagreements between two companies, Simonson acknowledged that was true-but simply because all three executives base their arguments on “the facts”-which clearly lie at the center of the two companies’ many disputes.
(CEO Olli-Pekka Kallasvuo said last month that his company’s disputes with Qualcomm were not representative of Nokia vs. Qualcomm but “the industry vs. Qualcomm.” CTO Tero Ojanpera said late last month that Qualcomm was stalling the global uptake of 3G.)
“The three of us are the relevant Nokia executives who speak on this topic,” Simonson said. “In that sense, it’s coordinated. But the beauty of this is that it doesn’t require much coordination. Our remarks are fact-based and rather straightforward. In other words, we don’t spend time coordinating complex messages, we just go to the facts.
“And the facts are, relating to our cross-licensing, Qualcomm had a vast majority of the IPR in the old CDMA technology. We and others had very little at that time. The change in that situation was a primary driver in our cross-licensing agreement. We’re fully paid up on that now and we have no need for it because we’re out of developing that kind of CDMA device.
“In the meantime, we and others have developed W-CDMA and other technologies and people can argue-and Qualcomm and we do argue-which one has the most essential IPR in W-CDMA. But nobody can argue that Qualcomm has the most or the relevant amount of IPR in the important, go-forward technology around 3G as they did in the earlier situation. We have a better position in future technologies vis-
