Kissing And Making Up – Nokia and Qualcomm End Legal Tangles With New Agreement

In a step that is to end all forms of legal tangles currently existing between cell phone giant Nokia Corporation and manufacturer of cell phone chips Qualcomm Inc., the two companies have inked a new agreement for the next 15 years.

Not only would the new agreement end of all legal issues currently existing between Nokia and Qualcomm, it would also clear all doubts about future licensing programs that Qualcomm may have entertained. Nokia would also withdraw a complaint it had lodged with the European Commission against Qualcomm.

Earlier in the day, the possibility of an agreement coming through seemed to grow in strength after a deferment in the trial involving Qualcomm and Nokia in Wilmington’s Delaware Chancery Court and a delay from Qualcomm in making public its quarterly financial statements.

The agreement takes into account not just the currently existing standards for high-speed mobile phones but also standards for the next generation of such phones. It also gives Nokia access to all Qualcomm patents through a license.

At the same time, it also gives San-Diego-based Qualcomm the guarantee that the cell phone giant would not use any of its own patents adversely against it. Nokia has also agreed to hand out ownership of some of its patents to Qualcomm. These include patents critical to WCDMA, GSM, and also OFDMA.

While there is no official word out on the detailed terms of the agreement between the two companies, what it effectively means is that Qualcomm can use Nokia technology on its own chipsets.

Speaking about the agreement, Nokia CFO Rick Simonson said, “This is one where saying this is important is not an overstatement. It’s a big relief for everybody.”

Nokia CEO Ollie-Pekka Kallasvuo said, “We believe that this agreement is positive for the industry, enabling the market to benefit from innovation and new technologies. The positive financial impact of this agreement is within Nokia's original expectations and fully reflects our leading intellectual property and market positions.”

Qualcomm CEO Paul Jacobs also sounded pleased with the development as he said, “I'm very pleased that we have come to this important agreement.”

Jacobs added, “The terms of the new license agreement, including the financial and other value provided to Qualcomm, reflect our strong intellectual property position across many current and future generation technologies. This agreement paves the way for enhanced opportunities between the companies in a number of areas.”

With this agreement, a lot of problems would possibly be solved between Nokia and Qualcomm. Both have filed lawsuits against each other and also registered complaints with regulators in different parts of the world – Europe, North America, and Asia.

That the agreement was a welcome event was mirrored in the stock market, with Qualcomm stock shooting up by 18% within hours of the announcement.