Nokia Makes $20 Million Payment for UMTS Patents from Qualcomm (Updated)

Nokia has officially stated in a press release released early this
morning that it has paid Qualcomm $20 million to cover usage of certain
Qualcomm UMTS patents provided through the European Telecommunications
Standards Institute, and used in current Nokia UMTS handsets through
the second quarter of this year. In a statement Nokia has stated that
this payment only covers those patents, and is not indicative of a new
cross-license agreement, nor does it cover the old agreement. Chief
Financial Officer Rick Simonson also stated:

believes that Qualcomm’s patent portfolio is concentrated in
the United States, and that it has few or no alleged UMTS patents in
many of
the countries in which Nokia has substantial UMTS handset sales. When
Qualcomm’s early patents become paid-up and royalty-free on April 9,
Qualcomm’s share of all patents relevant to Nokia UMTS handsets will
significantly decrease”

is important to note that as of April 9, 2007, Qualcomm’s entire
business becomes exposed to Nokia’s extensive GSM, WCDMA and CDMA
patent portfolios and Nokia will use all rights from those portfolios
defending itself against any new Qualcomm litigation” concluded
Simonson. It was also stated that more payments would be made
and would be officially announced.

Release (Nokia)

Update: In response to the payment made by Nokia on Tuesday, Qualcomm has filed a demand for arbitration with the American Arbitration Association and stated that Nokia’s continued use of certain WCDMA patents after April 9th would constitute acceptance and an extension of the current cross-licensing agreement.

The company has also sought a ruling stating its entitlement to terminate Nokia’s licenses and any rights under the current agreement if Nokia sues after April 9th, as well as stating that it considers Nokia’s recent payment as an intention to violate the agreement. Qualcomm has also refuted Nokia’s claim of paying less than 3% in cumulative WCDMA royalties through 2007, by stating that they have been paying more than 3% solely to Qualcomm, and has called Nokia’s statement deceptive and misleading.