Nokia, Qualcomm Settle Patent Disputes

In a 15-year licensing deal between the world's largest handset maker and the world's largest cell phone chip maker, Nokia and Qualcomm end their dispute over patent rights that cover a large number of wireless standards, including WCDMA, GSM and OFDMA.

Nokia and Qualcomm ended a long-running patent dispute July 23 with a 15-year licensing agreement. The deal ends all litigation between the two companies, including Nokia withdrawing a European Commission complaint against Qualcomm.

The agreement was reached after a busy legal day for the two companies. In Wilmington, Del., a court delayed the start of a trial where Nokia was suing Qualcomm for allegedly reneging on its agreement to license Qualcomm's technology on a fair basis. In Germany, a patent court tossed out a Qualcomm patent infringement complaint against Nokia.

The July 23 agreement between Nokia and Qualcomm ends those court battles and other legal disputes the two companies have been waging against each other since an original patent agreement between Nokia, the world's largest handset maker, and Qualcomm expired. Analysts estimate Nokia pays about $500 million a year in patent royalties to Qualcomm, the world's largest manufacturer of cell phone chips.

Under the terms of the new agreement, Nokia gets a license under all Qualcomm's patents for use in Nokia mobile devices and Nokia Siemens Networks infrastructure equipment. Nokia has also agreed not to use any of its patents directly against Qualcomm, allowing Qualcomm to integrate Nokia's technology into Qualcomm's chip sets.

Nokia agreed to an up-front payment and ongoing royalties to Qualcomm. Nokia has agreed to assign ownership of a number of patents to Qualcomm, including patents declared as essential to WCDMA, GSM and OFDMA. The specific financial terms of the deal were not disclosed.

"We believe that this agreement is positive for the industry, enabling the market to benefit from innovation and new technologies," Nokia CEO Olli-Pekka Kallasvuo said in a statement issued with Qualcomm. "The positive financial impact of this agreement is within Nokia's original expectations and fully reflects our leading intellectual property and market positions."

Paul Jacobs, Qualcomm's CEO, added in the statement: "The terms of the new license agreement, including the financial and other value provided to Qualcomm, reflect our strong intellectual property position across many current and future generation technologies. This agreement paves the way for enhanced opportunities between the companies in a number of areas."

The deal covers various wireless standards including GSM, EDGE, CDMA, WCDMA, HSDPA, OFDM, WiMax, LTE and other technologies.