Qualcomm has lots of friends, but Nokia is not one of them. In fact, Nokia is almost an arch enemy; this club includes Texas Instruments (TI), who with Nokia, was trying to develop CDMA chips for Nokia phones (mostly), but this didn’t work out because Qualcomm apparently was charging too much to license its patents for TI. That was several years ago, and TI’s quietly gave up on developing CDMA chips.
Fast forward and there’s a new squabble between Nokia and Qualcomm. The licensing agreement that allows Nokia to use Qualcomm’s CDMA (Code Division Multiple Access) patents expired in April 2007, and the two are struggling to extend this agreement. Without licensing Qualcomm’s patents, Nokia cannot sell 3rd Generation (3G) phones or other handsets that use Qualcomm’s CDMA technology. Likewise, Qualcomm will also have to stop selling chips that rely on Nokia patents. So its in both parties interest to eventually work out an agreement. Apparently, Qualcomm CEO Paul Jacobs thinks a final deal with Nokia will take several years.
The biggest likely reason for the holdout is that Nokia wants to reduce the licensing fee it pays Qualcomm, especially since Nokia has inserted some of its intellectual property into 3G standards. While Nokia has a stronger hand than before, Qualcomm has the ultimate upper hand.
Now, Nokia is trying other means to tame the tiger called Qualcomm.
For one, Nokia and others have filed complaints with the European Commission late last year, charging Qualcomm with anti-competitive behavior, accusing Qualcomm of charging the same rate to license its patents for WCDMA as it does for CDMA2000 even though its contribution to WCDMA is much smaller.
Next, Nokia filed a complaint with the U.S. International Trade Commission alleging that Qualcomm’s products infringe on 5 Nokia patents that improve the performance and efficiency of cell phones, as well as enable lower manufacturing costs, smaller product size and increased battery life. Nokia is asking for a ban on Qualcomm chips in the United States. Interestingly, Qualcomm has filed its own patent-infringement charge against Nokia with the ITC, and the issue is scheduled to go to trial next month.
If Qualcomm gives into Nokia, Qualcomm’s other patent licensees such as Samsung Electronics and LG Electronics will likely push for cheaper licensing deals with Qualcomm !
In the least, this whole patent thing seems to be taking new twists and turns every month!