Nokia Agrees to pay Royalties
Last modified on Thursday, 24 July 2008 08:09
After three years of battling each other, Qualcomm and Nokia have entered into an agreement to end their feud after Nokia agreed to make an upfront royalties payment as well as to continue to pay ongoing royalties to U.S.-based Qualcomm, Inc.
The 15-year term agreement also gives Nokia license rights to use Qualcomm's patents in its phones and Nokia Siemens Networks infrastructure equipment. In reciprocation, Qualcomm has the right to use Nokia’s technology in Qualcomm’s chipsets and Nokia has assigned ownership of several key patents to Qualcomm. This includes patents that are an essential part of the WCDMA, GSM and OFDMA wireless technology standards and cover additional standards including EDGE, CDMA, HSDPA, WiMAX, LTE and other technologies.
Nokia also announced that as part of the settlement agreement it will withdraw an anti-competitiveness complaint filed with the European Commission against Qualcomm. Now that the companies have decided to play nicely with each other Qualcomm’s shares rose 15 percent in late trading.
Some analysts declared Nokia the victor, as it agreed to pay lower royalty rates than it had previously been paying Qualcomm under their previous agreement. The consensus among analysts, however, is that the agreement will provide stability between two of the world’s heavyweights in the mobile phone industry.
Nokia’s CEO, Olli-Pekka Kallasvuo, issued the following statement: "We believe that this agreement is positive for the industry, enabling the market to benefit from innovation and new technologies. The positive financial impact of this agreement is within Nokia's original expectations and fully reflects our leading intellectual property and market positions."
Qualcomm’s CEO, Dr. Paul Jacobs, shared his enthusiasm: "I'm very pleased that we have come to this important agreement. 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."