Nokia Q1 2007 Earnings Call Transcript
Posted on Apr 19th, 2007 with stocks: NOK
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Snip:
Rick Simonson
Thanks, Olli-Pekka. First, I want to cover a few key points around the recent IPR activity, try to cut through what seemed like a lot of noise and discuss what is relevant and important for Nokia. As you know, April 9th passed without any new agreement between Nokia and Qualcomm. However, we continue to be in cross-license negotiations and are working to reach a mutually acceptable agreement as soon as possible. After April 9th, Qualcomm's early patents are now fully paid up, royalty-free to Nokia. Any future royalty arrangement with Qualcomm needs to address Qualcomm's latter patents only. This agreement should reflect that we believe that to Qualcomm's relative contribution to the development of technology used in mobile devices, especially W CDMA, is significantly lower than in 1992.
Reflecting these changes that occurred over the partial expiration of the old agreement, and other compelling reasons, we made a $20 million payment to Qualcomm, which we believe is fair and reasonable compensation for the use of Qualcomm's patents in UMTS handsets during this quarter. We intend to make similar payments in the future and we will announce these payments when they are made.
Since Qualcomm has indicated they will not accept our payouts, we have deposited them in an escrow account for Qualcomm’s benefit. We also have said that Nokia has paid less than 3% cumulative license fees for all patents under all its patent license agreements. This number is a gross number, and it excludes infrastructure royalties and all royalty income collected by Nokia.
The point of this disclosure is that we want to highlight that there's no such thing as a Qualcomm standard agreement or a so-called standard rate. The actual payment -- i.e., what you pay -- is subject to a lot of different commercial terms and conditions from Qualcomm. We then later stated that we believed Qualcomm is currently using over 100 of Nokia's GSM, WCDMA, and CDMA 2000 central patens in its chipsets. We have yet to agree with Qualcomm on the compensation due to us for these patents, but this is a very important and critical component to our ongoing negotiations. |
