Ericsson hopes quick deal in Qualcomm-Nokia battle
Wed Apr 11, 2007 3:48pm ET
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HELSINKI, April 11 (Reuters) - Ericsson (ERICb.ST: Quote, Profile , Research) hopes to see a quick solution in a technology licence dispute between Qualcomm (QCOM.O: Quote, Profile , Research) and Nokia (NOK1V.HE: Quote, Profile , Research) before it hurts the whole wireless industry, Ericsson's chief executive was quoted as saying on Wednesday.
A major cross-licensing agreement over technology patents between U.S. chip maker Qualcomm and Nokia expired partly on Monday, and their increasingly bitter battle is worrying investors and the industry on both sides of the Atlantic.
"I hope that the parties can reach some kind of agreement as soon as possible, patent fees cannot become an obstacle for the development of this industry," Ericsson Chief Executive Carl-Henric Svanberg was quoted as saying to Finnish news agency Startel.
The legal dispute between the world's No. 1 cellphone maker Nokia and Qualcomm centres on Nokia's use of Qualcomm patents for 3G mobile phones, but it also has a bearing on Qualcomm's chips business, which uses many Nokia-patented technologies.
Analysts estimate Nokia pays Qualcomm annually around $500 million.
"Patent payments in the industry are split in a wrong way. Traditional and larger players, like Qualcomm, can demand too high payments while others don't get even what they deserve," Svanberg was quoted as saying.
Ericsson is part of a group of six companies including Nokia that have complained to the European Commission about how much Qualcomm charges in royalties for use of its technologies.
Representatives for Qualcomm and Nokia were not immediately available to give an update on the status of their negotiations, which appeared to have reached a stalemate.
Qualcomm asked last week the American Arbitration Association to rule that Nokia's use of its patents after April 9 would amount to a choice by the Finnish company to extend their existing pact and pay the same royalty rate.
Nokia, which has been arguing for lower fees, said on April 5 it had paid $20 million to use Qualcomm's patents in the second quarter. Qualcomm dismissed the payment as a fraction of what it should receive.
Some analysts say it is unlikely that arbitration could help the companies at this stage, while others expect a flurry of new lawsuits.
Nokia has argued that the fees it pays to Qualcomm should reflect the investment it has made to develop high-speed wireless technology since their last licence agreement.
"When the dust settles, I'm sure this case will show the direction. I hope after this we can get rid of the ghost stories on what kind of patent fees are possible in this business," Svanberg said. (Additional reporting by Sinead Carew in New York)
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