Nokia and Qualcomm keep fighting like two schoolchildren who can’t share a ball. One pushes the other, the other pushes back, and soon a grown-up has to try to break up the fight. But, in this case the ball is a bevy of intellectual property patents and the grown-up is the legal system. And, in the most recent round of fighting, Nokia just payed up $20 million to push Qualcomm back, for now. The two are fighting over licensing terms regarding 3G technology – UMTS (Universal Mobile Telecommunication System).
The two companies are doing more and more of their patent-right negotiations in court rather than the boardroom. On one side we have Qualcomm – whining about Nokia using their UMTS patents in 3G handsets, and demanding a huge payment. On the other side we have Nokia – insisting that they shouldn’t have to pay up as much as Qualcomm wants, while using their own patents regarding GSM, WCDMA, and CDMA as a defensive strategy.
Nokia’s genius strategy will buy them some until Qualcomm and Nokia’s licensing rights expire on April 9, 2007. Once that happens, says Rick Simonson, Nokia’s Chief Financial Officer, “Qualcomm’s share of all patents relevant to Nokia UMTS handsets will significantly decrease.” In other words, come April 9, Qualcomm will have less leverage to bully Nokia into paying a primo price for using Qualcomm’s patented technology.
Nevertheless, Qualcomm says that the legal battle will continue past the patent right expiration date.