Nokia makes $20M payment to Qualcomm for patents

Nokia Corp. may have bought itself a little more time in a legal dispute with Qualcomm Inc., which wants Nokia to stop selling some of its mobile phones until it pays for new patent licenses.

The Finnish equipment manufacturer said Thursday that it has paid Qualcomm US$20 million to license some of its patents related to 3G (third generation) mobile phones through the second quarter of 2007.

The two companies are in the process of renegotiating a patent licensing agreement that expires on April 9.

Thursday's payment does not extend that agreement, though. Instead, Nokia said, it is for licenses that Qualcomm provides through the European Telecommunication Standardization Institute (ETSI), the organization responsible for the UMTS (Universal Mobile Telecommunications System) 3G mobile phone standard, among others.

The two companies have conducted their negotiations as much in the courts as elsewhere.

On Tuesday, Qualcomm filed suits in two U.S. District Courts, seeking to block sales of Nokia phones using GSM (Global System for Mobile Communication), GPRS (General Packet Radio Service) and EDGE (Enhanced Data Rates for GSM Evolution) technology because, it said, they infringed on its patents. Qualcomm has similar patent enforcement actions pending in the U.K., France, Germany, Italy and China, it said.

Last month, Nokia filed suit against Qualcomm in the Netherlands and Germany, arguing that it shouldn't have to license some Qualcomm patents because its suppliers had already paid to license the disputed technology themselves.

Nokia sees Thursday's $20 million payment as fair and reasonable compensation for use of Qualcomm patents in its UMTS handsets, it said.

When the companies' patent agreement expires on Monday, some of Qualcomm's earlier patents expire with it, Nokia said, adding that it expects Qualcomm's patent portfolio to become less relevant to its UMTS handset production.

In a parting shot, Nokia warned that it too holds patents that cover Qualcomm's WCDMA (Wideband Code Division Multiple Access) semiconductor products.

Qualcomm representatives in Europe could not be reached for comment.

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