Nokia, Qualcomm Continue Licensing Talks

Nokia Corp. and Qualcomm Inc. said Tuesday they expect no disruptions to consumers as the wireless industry heavyweights try to settle differences over licensing fees.

High-stakes negotiations continued as a 2001 agreement expired Tuesday.

"Business is continuing as usual, and we are continuing the negotiations," Nokia spokeswoman Anne Eckert said, providing no details or timetable for the talks. "We are trying to find a mutually acceptable agreement."

Bill Davidson, Qualcomm's vice president of global marketing and investor relations, said the company believes "the parties remain far apart and are not any closer to reaching agreement."

Qualcomm, which designs and manufactures digital processors that are central to cell phones and cellular networks, licenses its technology patents and wants to renew terms of its 2001 pact. Nokia, the world's largest handset maker, wants to reduce payments to Qualcomm.

The dispute, which could spark a new wave of lawsuits between the wireless industry heavyweights, centers on royalties for a standard known as wideband CDMA, or WCDMA, which is growing quickly in Europe and elsewhere.

Nokia said it has paid all licensees, including Qualcomm, less than 3 percent on WCDMA products. Qualcomm said the rate is higher but has declined to be more specific. Qualcomm has said its standard rate is about 5 percent of a handset's wholesale price.

Last month, Qualcomm President Steve Altman predicted additional litigation after the agreement expired but said the companies would eventually come to terms.

The negotiations carry big consequences for each company and analysts said it may help determine how much consumers and equipment makers will pay for WCDMA phones.

The developments are the latest in a long series of legal and trade disputes between the two companies, which signed their first mutual licensing agreement in 1992.

Last week, Nokia said it paid Qualcomm $20 million in licensing fees for the second quarter, calling it a "fair and reasonable" price. Qualcomm dismissed the Finnish company's offer, describing it as a "nominal" sum that is well below what Nokia currently pays in licensing fees.

Last week, Qualcomm filed patent infringement lawsuits against Nokia in federal courts in Texas and Wisconsin. Last month, Nokia sought rulings from courts in Germany and the Netherlands that Qualcomm cannot collect licensing fees on Nokia phones based on Texas Instruments Inc.'s chips.

Shares in Espoo, Finland-based Nokia rose 17 cents to $23.71 in afternoon trading Tuesday on the New York Stock Exchange, while shares in San Diego-based Qualcomm shares rose 13 cents to $42.81 on the Nasdaq Stock Market.


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