Qualcomm and Nokia used to be pals — or at least civil — and struck licensing deals years ago. Computer Business Review Online even reported that Nokia could pay as much as $500 million a year in royalties to Qualcomm — a substantial revenue driver for Qualcomm and significant intellectual property access for Nokia.
Now after years of a bitter dispute over Qualcomm’s royalty rates and intellectual property rights, marked by the latest patent infringement suit and a $20 million payment for patent licenses from Nokia week (update), the companies are facing the end of parts of their agreement on April 9th, 2007. Qualcomm CEO Paul Jacobs has said he isn’t too optimistic they can reach a deal, and according to Lazard Capital Markets, Qualcomm intends to spend over $200 million this year in legal fees to defend its royalty rate. How did things get so bad? Check out our timeline of the Nokia, Qualcomm feud:
- April 9th, 2007: Nokia and Qualcomm have a CDMA/WCDMA licensing agreement that will expire April 9, 2007. Will they be able to reach an agreement? Not so far.
- (update) April 5t, 2007: Nokia pays $20 million to Qualcomm for UMTS patent license for second quarter 2007.
- April 2, 2007: Qualcomm files GSM Patent infringement suit against Nokia.
- March 19, 2007: Nokia files a complaint against Qualcomm in Germany (Regional Court of Mannheim) and the Netherlands (Hague District Court) and asks the courts to declare “Qualcomm’s European patents to be exhausted in respect of products placed on the European Union (EU) market with a Qualcomm license, in this instance chipsets supplied by Texas Instruments.” Qualcomm says Nokia’s complaint is meritless.
- February 27, 2007: A judge stays the complaint filed with the ITU against Nokia by Qualcomm until further notice.
- February 22, 2007: Qualcomm CEO Paul Jacobs says its MediaFLO deal with Nokia-friendly carrier AT&T/Cingular Wireless could help with the Nokia lawsuit. Wishful thinking?
- August 9, 2006: Nokia files a complaint against Qualcomm with the Delaware Court of Chancery, asking the Court to order Qualcomm to license its IP for GSM technology standards on “fair, reasonable, and non-discriminatory (FRAND) terms.”
- June 2006: Nokia cancels JV with Sanyo that was focused on CDMA, and scales back from the CDMA market.
- June 9, 2006: Qualcomm files a complaint with the ITC that Nokia is infringing on six of its patents.
- May 24, 2006: Qualcomm sues Nokia in British courts over alleged patent infringement related to GSM technology.
- November 4, 2005: Qualcomm files a complaint in San Diego that alleged Nokia infringed on 11 of its patents and one patent owned by its subsidiary Snaptrak.
- October 2005: Six companies, including Nokia file a complaint with European telecommunication regulators, claiming that Qualcomm’s licensing arrangements are stifling competition.
- July 2001: Nokia and Qualcomm expanded their existing CDMA subscriber cross-license agreement to include all versions of CDMA standards, including 3G standards such as wideband CDMA. Word on the street was that Nokia got the short end of the deal.
- 1992: The companies say they have had patent license agreements since 1992.
It will be intersting to see how this battle for 3G Dominance unfolds.
If you haven’t visited Qualcomm’s main building, after signing in and entering, the first thing you see is PATENTS, hundreds of them, adorning the walls. Qualcomm always has been and always will be a litigious, IP based company.
Unfortunately for them they’ve played too hard a game of hardball, and the carriers have wised-up to not getting locked in to their ridiculously high fees. They will progressively get pushed out and their participation in future network rollouts will be increasingly limited.
Reap what you sow.
You missed a bunch of Qualcomm Nokia squabbles prior to 2005. I don’t remember specific dates and details, but I clearly remember at least nasty words being exchanged in the press about who had more IP for UMTS back in its earlier days around the turn of the millenium.