NEW YORK -(Dow Jones)- In the latest twist to the licensing dispute between Qualcomm and Nokia, Qualcomm wants an arbitrator to rule that continued use of its technology would result in the automatic extension of the companies' current agreement.
The two companies are barreling into the Monday deadline, in which their existing cross-licensing agreement expires. Qualcomm is arguing that use of its technology beyond that date indicates Nokia's willingness to extend the current agreement and terms. The San Diego company is taking its case to the American Arbitration Association.
A spokesman for Nokia wasn't immediately available for comment.
While the use of a third party is seen as a possible option down the road, the companies are too far apart for an arbitrator to be effective in closing the gap, said Prudential Financial analyst Inder Singh.
"We believe that both Qualcomm and Nokia are exploring all possible avenues to put pressure on each other to resolve this matter in a timely fashion," he said in a note.
Nokia and Qualcomm are tussling over what each will have to pay for technology with phones using technology called code division multiple access, or CDMA, as well as the third-generation version, WCDMA. The fight pits the world's largest handset maker against a technology company that pioneered CDMA, which powers services for carriers such as Sprint Nextel.
The fight has already resulted in multiple lawsuits, and analysts believe the legal broadsides will continue once the deadline passes. In addition to the extension, Qualcomm is also seeking a ruling that would allow it to terminate Nokia's rights and licenses if the Finnish handset maker sues Qualcomm for patent infringement.
The two companies signed their current licensing agreement in July 2001, and Nokia has the right to extend the contract through the end of 2008.
Nokia said earlier Thursday that it would pay Qualcomm $20 million, representing the sum it believes is the fair and reasonable for the use of Qualcomm patents in Nokia WCDMA phones in the second quarter.
Qualcomm said that while the payment is an acknowledgment of Nokia's obligation to pay royalties, the nominal amount does not follow the terms of its old agreement.
"Leaving some money on the counter does not make the act any less unlawful," Qualcomm said in a statement.
Singh said the amount appears to be a small fraction of what Nokia would have been required to pay under the old agreement, and isn't based on average selling price and volume.
As a result, the payment wasn't seen as a step toward a settlement. "This gesture does not end any o the legal issues as the heart of the debate, and we do not believe that the two parties are any closer to an agreement," Singh said in a note.
Last week, Qualcomm Chief Executive Paul Jacobs told Dow Jones Newswires that the two sides were far apart in negotiations and that it would take an outside party to get the two to come to a settlement.
-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 6th April 2007
Posted to: www.cellular-news.com/story/23026.php