New Twist in Nokia-Qualcomm

Nokia makes a payment but claims its fee obligations are about to plunge.
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Nokia (NOK) - Get Report paid Qualcomm (QCOM) - Get Report $20 million to use its wireless chip patents in the second quarter, but the companies remain at loggerheads over a longer-term agreement.

The deal may allow the companies to sidestep the expiration of prior licensing agreements set for this coming Monday. Nokia and Qualcomm have been busy suing each other and generally blustering around about the terms of future licenses in a tiresome negotiating spectacle.

Nokia said the payment announced today does not extend, and is not related to, the old agreement. Rather, it is based on the licenses that Qualcomm has agreed and provided through the European Telecommunication Standardization Institute.

"As we continue to negotiate the new cross-license agreement, Nokia views this payment as fair and reasonable compensation for the use of relevant Qualcomm essential patents in Nokia UMTS handsets during the second quarter of 2007," said Nokia. "Nokia 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, 2007, Qualcomm's share of all patents relevant to Nokia UMTS handsets will significantly decrease."