Nokia's Qualcomm Suit Dropped

U.S. Trade regulators dismiss Nokia's lawsuit, as arbitration looms.
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Nokia's

(NOK) - Get Report

patent dispute with

Qualcomm

(QCOM) - Get Report

has been dismissed by U.S. trade regulators as the ongoing licensing squabble plays out in arbitration.

The U.S. International Trade Commission says it has dropped Nokia's patent infringement lawsuit against Qualcomm. The ITC's role had seemed somewhat limited given that the companies are in binding arbitration over how much Nokia should pay Qualcomm in tech licensing fees.

A report by

Reuters

quotes ITC official John Greer saying: "The case is finished at the ITC."

Nokia is the largest mobile phone maker and one of the biggest contributors to Qualcomm's patent licensing and handset royalty revenue. The legal battle between the two wireless titans has been costly, and a drag on Qualcomm's earnings performance.

But some analysts, looking beyond the legal costs, see the likelihood of a lower royalty rate between Nokia and Qualcomm. In a note Monday, JPMorgan analyst Ehud Gelblum says the new rate, order by either a court or arbitrators, will likely make for a "blended average rate" across all its licenses of around 2% to 2.5%, down from the estimated 4% to 4.5% range.

Qualcomm shares fell 32 cents to $41.02, while Nokia dropped 86 cents to $38 in late-afternoon trading Wednesday.