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Qualcomm sues Nokia

The London weekly The New Statesman holds an annual competition for the most boring, platitudinous, boring, not-telling-us-anything-we-don't know-already newspaper headline. A couple of years ago, for example, a London Times headline won: "In India, wherever you go there are people." My contribution to the competition would be: "Qualcomm sues for patent infringement" (the good thing about this headline: You can use it every year). Qualcomm has earned a well-deserved reputation as a sharp-elbowed, litigation-happy company ready to sue other companies for patent rights infringement at a drop of a hat. Many suspect that most of the company's income comes from royalties (ABI's Phil Solis says that only about a third of the company's income comes from royalties). Players in the WiMAX sphere have been nervous ever since Qualcomm has acquired Flarion, a company with a portfolio of WiMAX-related patents. It is only a question of time before Qualcomm builds a toll booth and begin the charge other companies for its WiMAX patents. Solis says that WiMAX companies had better begin to include such royalty payments as the cost of doing business.

A taste of what is to come is on display as Qualcomm has just fired yet another round in its on-going war with Nokia. In a complaint filed with the U.S. International Trade Commission last week Qualcomm says that Nokia is engaging in unfair trade practices by importing and selling certain mobile phones which, what else, infringe on six Qualcomm patents. The complaint is the latest indication that Qualcomm and Nokia are struggling to renegotiate a licensing contract between the two which is set to expire in early 2007. Nokia responded that the legal activities reflect Qualcomm's concern over the negotiations, and that Nokia has a stronger patent position now than it did in the 1990s.

Qualcomm owns the bulk of the intellectual property behind the CDMA standard and thus earns substantial royalty profits when companies such Nokia make CDMA products. Mobile phone networks in most places in the world, however, are migrating to W-CDMA, a standard created from intellectual property submitted by many companies. Nokia emphasized that it has far more essential patents for the standard than Qualcomm.

The trade commission filing is similar to other lawsuits filed by Qualcomm in the US and the UK which charge Nokia with infringing on patents in its GSM products. This surprised some observers -- how could Qualcomm sue Nokia over improvements in GSM when GSM is an older technology than CDMA? Leave it to Qualcomm's lawyers: They argue that the competition fro CDMA force other companies to improve the older GSM, so that GSM now infringes on CDMA patents.

For more on the Qualcomm-Nokia battle
-see Nancy Gohring's Techworld report


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