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Qualcomm-Nokia still in talks after pact expires

Posted: 12 Apr 2007 ?? ?Print Version ?Bookmark and Share

Keywords:W-CDMA standard? licensing fees? patent infringement?

Even after the expiration of their licensing agreement on April 9, Nokia Corp. disclosed that it is continuing talks with Qualcomm Inc., according to an AP report.

Nokia spokeswoman Anne Eckert said that the company is continuing with the negotiations with Qualcomm and both companies are trying to find a "mutually acceptable agreement."

A string of lawsuits have been filed by both companies on royalties for the W-CDMA standard. Nokia and Qualcomm inked in a licensing agreement in 2001 and the handset maker is pushing to reduce the royalty fees.

According to Nokia, it has paid all licensees, including Qualcomm, less than 3 percent on W-CDMA products. However, Qualcomm claims that the rate is higher and that the standard rate is about 5 percent of a handset's wholesale price.

Last week, the handset maker said it paid Qualcomm $20 million in licensing fees for Q2, calling it a "fair and reasonable" price. The chipmaker, however, rejected the offer describing it as a "nominal" sum that is below what Nokia currently pays for its licensing fees.

Qualcomm filed patent infringement suits against Nokia in federal courts in Texas and Wisconsin. The handset maker on the other hand, filed suits in Germany and the Netherlands to prevent Qualcomm from collecting licensing fees on Nokia phones based on Texas Instruments Inc.'s chips.

Qualcomm president Steve Altman predicted that additional litigation will come even after the agreement expired but said both companies would eventually come to terms. Nokia spokesman William Plummer commented that the dispute will unlikely affect the customers, saying that such license negotiations are a "normal course of business," according to the report.

Analysts, however, believe that the negotiations will carry big consequences on how much consumers and equipment makers will pay for W-CDMA phones and will help determine how the standard takes hold.

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