Nokia v. QUALCOMM (Delaware Court of Chancery) Update ...
"You don't need to be in 17 different places. ... Try to agree. Think of options [including arbitration]"
- Vice Chancellor Leo E. Strine, Jr -
In the last 2 years, while in the process of negotiating a renewal of their licensing agreement with Nokia, and as a tactic in that process, "non-litigious" QUALCOMM has filed seven separate but similar lawsuits in different jurisdictions in the USA (3), UK, Germany, France, Italy, against Nokia.
In that same time period, in addition to being one of 6 complainants to the EU for alleged QUALCOMM anticompetetive practices, Nokia has filed one suit against QUALCOMM. That suit "seeking declaratory and injunctive relief relating to alleged commitments made by QUALCOMM to wireless industry standards setting organizations was filed in the Court of Chancery here in Delaware on August 9, 2006.
>> Nokia Asks Delaware Court to Enforce Qualcomm's Contractual Obligations in Essential Patent Licensing
Nokia Press Release
Espoo, Finland
August 09, 2006
nokia.com
Nokia announced today that it has filed a complaint against Qualcomm with the Delaware Court of Chancery in the U.S. Nokia is asking the Court to order Qualcomm to abide by its written contractual obligations to international standards setting organizations to license intellectual property essential to GSM and UMTS technology standards on fair, reasonable, and non-discriminatory (FRAND) terms. Additionally, Nokia is seeking a Court order to affirm that Qualcomm is not entitled to injunctive relief in relation to alleged infringement of patents declared essential to a standard.
Qualcomm has filed three separate legal actions against Nokia in U.S. Federal Court, a court in the United Kingdom and the U.S. International Trade Commission where it has requested injunctions against Nokia. Nokia is taking this action as a defensive measure to ensure there is a consolidated forum for addressing these issues and is asking the Court to enforce Qualcomm's obligation to negotiate royalties on FRAND terms. Additionally, Nokia is asking the Court to affirm the key elements of FRAND, where the two companies to-date have had differing views, to solidify a framework for future intellectual property licensing negotiations.
This action seeking resolution through the Court follows the European Telecommunications Standardization Institute (ETSI) dispute resolution process. ###
QUALCOMM has subsequently moved to dismiss the complaint. Below is a Bloomberg update.
>> Qualcomm Asks Judge to Dismiss Nokia Patent-Fee Case
Phil Milford
Bloomberg
November 30, 2006
tinyurl.com
Qualcomm Inc. asked a Delaware state judge to dismiss a lawsuit by Nokia Oyj accusing it of charging unreasonable patent licensing fees for cell-phone chips.
Finland's Nokia, the world's largest maker of mobile phones, sued Qualcomm in Delaware Chancery Court Aug. 8, claiming that Qualcomm fought to establish its chip inventions as industry standards, then demanded excessive royalty rates. Qualcomm argued that the case belongs in federal court.
The case is basically about patents, and that's ``for a federal judge to decide,'' Qualcomm lawyer Evan R. Chesler, of New York-based Cravath, Swaine & Moore, told Judge Leo Strine Jr. at a hearing today in Wilmington. Licensing disputes ``are for state courts to determine'' because they involve contracts, said Nokia lawyer Fred Lorig of Los Angeles-based Quinn Emanuel Urquhart Oliver & Hedges.
Nokia, with $4.5 billion in net income on $42.4 billion in sales last year, is in negotiations with Qualcomm to get a discount on fees, Paul Jacobs, chief executive officer of San Diego-based Qualcomm, said on Nov. 17. A Nokia technology-license agreement with Qualcomm expires April 9, and Qualcomm said Nov. 2 that lack of an accord may lower profit this year by 4 cents to 6 cents a share.
Qualcomm reported $2.47 billion in net income for fiscal 2006 on $7.52 billion in sales.
In its complaint, Nokia asked Strine to order Qualcomm to license its cell-phone patents on ``fair, reasonable and non- discriminatory terms,'' and to issue an injunction to prohibit Qualcomm from pursuing patent-infringement remedies.
`Warfare'
During the hearing, Strine noted that the companies are involved in ``labyrinthine warfare,'' with related litigation in federal court in San Diego and in courts in the U.K., France and Germany, ``slugging each other wherever they can.''
Strine said the dispute presents ``an appalling situation'' that ``doesn't reflect well on either company'' and suggested the parties aim for a single forum to settle the matter.
``You don't need to be in 17 different places,'' the judge said.
``Try to agree'' and ``think of options'' including arbitration, Strine told lawyers at the end of the hearing. He said a decision on the case wasn't ``a huge emergency,'' and told lawyers they can continue to collect evidence through the holiday season.
In light of the other domestic and foreign cases, ``something's got to give,'' Strine said. ###
Profile: Vice Chancellor Leo E. Strine, Jr. (2nd from left, below)
The Honorable Leo E. Strine, Jr. became a Vice Chancellor of the Court of Chancery in November, 1998. Immediately prior, Vice Chancellor Strine was Counsel to Delaware Governor Thomas R. Carper since 1993. Before his position with Governor Carper, Vice Chancellor Strine served as a corporate litigator at Skadden, Arps, Slate, Meagher & Flom and as law clerk to Judge Walter K. Stapleton of the U.S. Court of Appeals for the Third Circuit and Chief Judge John F. Gerry of the U.S. District Court for the District of New Jersey. Vice Chancellor Strine graduated magna cum laude from the University of Pennsylvania Law School, and received his Bachelor's Degree summa cum laude from the University of Delaware. ###
- Eric - |
