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April 6, 2007

Nokia Dials It In

Nokia and Qualcomm are tussling over patents. On Thursday, Nokia squeaked that it would pay Qualcomm $20 million for a quarterly license for Qualcomm patents related to CDMA wireless technology. In reply, Qualcomm snorted: "They have no right to do that."

Nokia has a standing license agreement with Qualcomm, but, rather than exercise an option to extend the agreement, the number was based upon Nokia's own assessment of the patents' value to Nokia.

Louis Lupin, Qualcomm general counsel, thought Nokia had slipped on its own banana peel. "What they have done is they have simply made up a number."

Qualcomm will be seeking arbitration of the dispute, planning to ask the American Arbitration Association to rule that Nokia must extend the existing agreement, hence paying more.

Nokia noodled that the $20 million was based on a "good faith" estimate of what it expects to pay after the agreement expires.

Prudential analyst Inder Singh saw some method in the madness: "It shows a willingness on their part to compensate Qualcomm." By doing so, Nokia may cut the possible stink of a court-sanctioned injunction. While these maneuvers may draw out coming to terms, Nokia and Qualcomm are extremely likely to settle, as cellular carriers, customers of both parties, don't appreciate the shenanigans.

How much Nokia currently pays Qualcomm is guesstimated (source: Wall Street Journal) to be 4.5% of the cost of a cellphone. Nokia toots that it has paid less than 3% in cumulative licensing fees for WCDMA handsets.

Posted by Patent Hawk at April 6, 2007 12:27 AM | Patents In Business

Comments

And by compensating we should understand paying a sufficient sum of money to keep their mouths shut and away from the courtroom.

Posted by: web sms me again at January 14, 2011 8:55 AM