Qualcomm and Nokia: lowering expectations on a swift resolution

The public posturing by Nokia Corp. and Qualcomm Inc. remains consistent in the hours after their cross-licensing agreement expired after midnight last night, while both parties appear to suggest they will be patient in their attempts to reach a new agreement.
Both sides appear ready for a lengthy period of continued negotiation, while investors’ and wireless industry players’ interest in the parties’ next moves is certainly at a peak. Will the two parties refrain from further legal challenges to give negotiators room to breathe? Or will legal challenges actually increase to ratchet up pressure on the other side? Will a third party-such as the American Arbitration Association, requested by Qualcomm-step in?
A Nokia spokeswoman reassured consumers today that the expiration of a cross-licensing agreement governing intellectual property rights between the two parties would not affect them. A Qualcomm spokesman said that his company’s long-term investors have expressed support for the company’s IP licensing business over short-term pressure on its stock value, which he acknowledged has been affected by the dispute.
“While negotiations will continue-and it is not unusual for negotiations to go beyond an expiration date-we will continue operating business as usual,” said Laurie Armstrong, a spokeswoman for Nokia.
“Our largest shareholders, who’ve been with us a long time, plan on remaining behind us in seeing this through,” said Bill Davidson, head of investor relations at Qualcomm.
After a year’s worth of rhetoric and legal challenges, the story of how Nokia and Qualcomm approach a mutually satisfactory agreement on cross-licensing over multi-mode handsets that include W-CDMA-a technology and growing market in which both sides claim patents on-remains murky. Virtually anyone who has pursued the legal descriptions of the patents in question will be stymied by technical complexity. Outsiders are not privy to the details of the now-lapsed cross-licensing agreement. And no one outside the two companies has claimed to have any details on how, when or where actual negotiations take place.
Such a situation has left observers with little to sift through beyond the two sides’ public statements and their publicly available legal filings against each other. And both sides’ public statements and legal filings have been designed to create the impression that the two companies are being fair and reasonable, while taking the most aggressive steps to champion their position.
Nokia essentially seeks to recast the companies’ now-lapsed agreement to reflect the value of its own patents and a changing landscape in IP values relating to W-CDMA, while Qualcomm believes that the lapsed agreement should be renewed. A year’s worth of rhetoric, posturing and legal challenges appear to have not changed these basic positions.