Qualcomm (QCOM) - Get QUALCOMM Incorporated Report brought another intellectual property case against Nokia (NOK) - Get Nokia Corporation Sponsored American Depositary Shares Report as war looms between the wireless giants.
For the second time in two months, Qualcomm has filed a complaint charging that Nokia has infringed on technology patents. Qualcomm asked the U.S. International Trade Commission to investigate licensing violations by Nokia and to bar imports of Nokia devices.
The complaint focuses on six Qualcomm patents related to so-called second-generation, or 2G, technologies including global systems for mobile, or GSM.
Nokia says it is evaluating the complaint and will respond as necessary.
Observers say the legal skirmishes over 2G patents are merely a warm-up to a much larger turf battle over third-generation, or 3G, patent rights.
Qualcomm and Nokia are currently negotiating a licensing contract that expires in April 2007. Hundreds of millions of dollars worth of royalty payments to Qualcomm are at stake, and Nokia has made it clear that it plans to challenge the San Diego tech shop's dominance in the field of wireless standards.
Qualcomm makes code division multiple access, or CDMA, chips for cell phones and also collects a fee for every CDMA phone sold. Nokia would clearly like to reduce or even eliminate Qualcomm's royalty take on future phones.
"With over 220 essential patents in GSM alone and far more essential patents than Qualcomm in 3G UMTS standard, Nokia holds a very strong patent position," says Nokia in a press release Monday.
Qualcomm shares dropped $1.22 to $42.22, a new low for the year. Meanwhile, Nokia fell 28 cents to $19.78 in midday trading Monday.