Nokia in no hurry to agree Qualcomm licensing deal
By Anne Morris, Total Telecom, in Helsinki
04 October 2006
'Time is not money' for Finnish vendor when it comes to agreeing new WCDMA deal says IPR executive.
Qualcomm said in July it was "hopeful" it would be able to extend its licensing contract with Nokia before the current agreement expires in April next year. But Nokia appears to be unconcerned about whether a deal is reached before the April deadline.
"I wouldn't say the sooner the better for us," commented Ulla James, director, IPR strategic marketing at the Finnish vendor.
"Time is not money for us," James said in an interview with Total Telecom during a Nokia technology briefing in Helsinki. "It's business as usual … That date can come and it can go – but it's a risk factor for Qualcomm."
James said if an agreement is not reached by April then Nokia will simply stop making royalty payments to Qualcomm for WCDMA essential patents, although it will remain in active negotiations. She was not prepared to disclose how much Qualcomm receives in royalties from Nokia, but given that WCDMA licensing fees are somewhere between E5 and E10 per phone the loss of income would not be welcome to the U.S. technology company.
James said Qualcomm and Nokia executives meet once or twice a month at present to discuss an extension of the agreement. She said the negotiations are "complex" because the IPR situation has become a lot more complex. "It's not just cross-licensing any more," she added.
James said Nokia signed a technology licensing agreement with Qualcomm for CDMA essential patents in 1992. In 2001 the companies verified that WCDMA was also included in this agreement.
But much has changed since 1992 and Nokia now wants to renegotiate the terms of its agreement to take into account the fact that it provides essential patents for the GSM elements in the WCDMA mix.
"Qualcomm needs access to those too," said James, who added that Qualcomm has a smaller position in WCDMA than CDMA.
Separately Nokia and five other vendors have also filed complaints against Qualcomm at the European Union claiming that the U.S. company is abusing the use of its wireless-technology patents.
According to the vendors, Qualcomm hasn't licensed its technology in "fair, reasonable and non-discriminatory terms", otherwise known as FRAND.
But how do you define what FRAND should be?
"It's easier to define what is not FRAND," said James.
Nokia is also a major owner of IPR and patents and views this as an important part of its business, although actual IPR revenue is quite small relative to the company's overall products business.
"It's a minor revenue stream of our business," said James. "The main benefits are strategic," she added, commenting that Nokia would not look to create IPR purely as a standalone business.
James noted that it is always better if a particular technology has a broad IPR holding distributed among a number of companies. She pointed to the example of Research in Motion as a warning of the dangers inherent in proprietary solutions when one company holds a key essential patent. She also noted that Sprint Nextel decided to implement WiMAX because it wanted a "healthy" IPR environment.
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