Nokia vs Qualcomm IP Dispute Intensifies

LONDON - The Qualcomm versus Nokia royalty spat has intensified once again with a court filing from Nokia claiming that some of its licenses from Qualcomm in Europe are fully paid up. This is another instance of brinkmanship that will reach a crescendo after April 9th when the technology sharing license between the two companies expires.

According to analysts at ABI Research, there will be no resolution to this situation without outside influence, because the two companies are negotiating from fundamentally opposite positions: Qualcomm values quality while Nokia points to quantity. Qualcomm sees the worth of its core WCDMA IP as far more valuable than the number of patents it holds, while Nokia contends that its volume of patent activity in recent years should be recognized by lower royalty fees.

Wireless research director Stuart Carlaw notes that, “This situation is reminiscent of the immovable object versus the unstoppable force: there has been too much posturing for either party to back down now. It will be one of two things that will break this deadlock: a court ruling, or ongoing damage to stock prices.” Carlaw goes on to add that, “Even if Nokia wins this battle, the average cumulative royalty rate for WCDMA multi-mode terminals will not be decreased a great deal, due to the need to support GSM and its royalty structure. At best there will be a 1% difference by 2011, with a cumulative rate likely to be around 7.4%.”

ABI Research found that Qualcomm holds a collection of the most frequently cited patents for the WCDMA standard. This is generally accepted as the best measure of patent portfolio quality. Correspondingly, Nokia has sunk billions of dollars into improving its patent position regarding WCDMA, and it is a given that they now own more patents relating to the technology than when the original license agreements were negotiated.