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Nokia, Qualcomm Settle Long-running Dispute
By: AP   |   Jul 24, 2008
The legal salvos between Nokia Corp. and Qualcomm Inc. stopped months ago, part of what officials at the wireless industry heavyweights described as a truce in a long-running battle that spanned three continents.

Peace came Wednesday as the two sides prepared for a courtroom showdown. Nokia, the world's largest handset maker, and Qualcomm, the world's largest maker of chips that run cell phones, agreed to settle a high-stakes licensing dispute and drop all legal complaints against each other in the U.S., Europe and Asia.

The 15-year licensing deal gives Nokia rights to a wide portfolio of Qualcomm's patents. Nokia will pay Qualcomm an upfront sum and ongoing royalties, but the companies did not elaborate on the terms.

Nokia, based in Espoo, Finland, said it will withdraw its antitrust complaint filed against Qualcomm at the European Commission. Nokia filed the complaint in October 2005 with five other companies, which led to a flurry of lawsuits between Qualcomm and its rivals and several regulatory probes into Qualcomm's licensing practices.

''This is one where saying this is important is not an overstatement,'' Rick Simonson, Nokia's chief financial officer, said in an interview. ''It's a big relief for everybody.''

The stakes were especially high for San Diego-based Qualcomm, which gets about two-thirds of its profits from licensing fees on its patents. Nearly all the rest of its profit comes from making chips.

Carriers and equipment makers will also be spared having to worry how legal uncertainties hanging over two influential companies might hamper their ability to deliver products and services, said Michael King, an analyst at technology researcher Gartner Inc.

''It's a huge weight off everyone's shoulders,'' he said. ''It was a game of brinksmanship. ... I think they both had to realize that continued litigation was only going to damage the entire industry.''

The agreement was announced after a judge in Wilmington, Del., delayed the opening day of a trial to address the licensing fees and Nokia's complaint that Qualcomm has ignored its commitment to license its patents on fair terms.

A licensing agreement between the two companies expired in April 2007. The new pact covers a host of technologies that didn't exist or were in their infancies when the two companies signed their initial agreement in 1992 and renewed it in 2001.
 
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