Detail on previous post re NOK and QCOM:
news.yahoo.com
He just helped his client achieve a tremendously favorable result, but litigator Steve Strauss couldn't help but feel a ping of sadness.
The billion-dollar case, the one in which he devoted the previous two years preparing for, had been called off.
In July, on the day it was set for trial, Qualcomm (Nasdaq: QCOM) reached a lucrative settlement with Nokia (NYSE: NOK) in their heated and closely watched intellectual property dispute.
"I analogize it to training for the Olympics, (but) they cancel your event and mail you your gold medal," he said. "So yeah, I was disappointed."
Strauss, a partner in the San Diego offices of Cooley Godward Kronish, was all set to question Nokia CEO Olli-Pekka Kallasvuo, the first witness in the case, when negotiators emerged from a marathon 40-hour session with an agreement July 23.
"I was ready to go. Every morning I woke up and thought about the case. Every night I went to bed and thought about the case. I deposed all the witnesses.
"On the other hand I was elated because it's such a great settlement for Qualcomm and, in our view, the settlement, in many ways, was better than the best result we could have achieved in litigation."
Terms of the settlement are confidential, but Strauss said Nokia agreed to a new, 15-year contract while also transferring 120 patent families to Qualcomm.
The agreement also provided for the dismissal of approximately 15 lawsuits between the two parties.
"I would say, since the Erickson settlement back in '98, it's the most significant event for Qualcomm," Strauss said. "It's probably one of the largest settlements in the country this year. It's really groundbreaking in the cellular industry because it involves two of the bigger players."
The settlement covers both third-generation and pending fourth-generation technologies, and creates opportunities for Qualcomm to do business with Nokia on the chip side.
Strauss said his bosses were so happy with the agreement they stood and clapped when he and his Cooley litigation team entered the board meeting following the announcement.
"It signals the end of the greatest challenge to Qualcomm's whole business model," Strauss said.
The settlement should save Qualcomm about $100 million in litigation costs, according to Strauss, and prevents the company from having to file numerous injunctions against Nokia.
Strauss began the dispute in early 2007 as the expiration of an agreement between the two cellular giants loomed in April of that year.
As the deadline passed with no formal extension, Nokia continued to use Qualcomm's patents without paying.
According to Strauss, Nokia claimed Qualcomm was overcharging for its patents and that other people contributed to the standard.
Expecting that Qualcomm would begin suing for infringement throughout the world, Nokia filed a preemptive action in Delaware.
The company tried to get a judge to prevent Qualcomm from getting any injunctions because the San Diego company wasn't licensing their technology on "fair and reasonable terms."
Instead of filing any infringement suits, however, Strauss and his team took a self-described "novel and creative" approach as it requested to go to arbitration. Looking to California civil code, Strauss contended that if Nokia was going to enjoy the benefits of Qualcomm's patents without paying, it was essentially exercising a contract extension "by conduct" and therefore owe Qualcomm royalties at the previous contract's rate.
By extending the contract, Nokia would be agreeing to all of the previous terms, including a provision that prevents either side from suing.
The two cases -- Nokia's action in Delaware and Qualcomm's arbitration request -- were combined in February 2008 and put on a fast track, with a trial date set for July.
Strauss said the legal theory of exercising the contract by conduct "gave Nokia pause because if we're right, than the agreement would've extended for 15 years."
He also said during discovery, Qualcomm's legal team uncovered some potentially embarrassing information about Nokia's conduct. And the trial was set to be televised with the eyes of the investment community watching.
"I hadn't considered what the effect of putting it on TV and having it be so public would have on the parties, and I think it had an effect," Strauss said.
Strauss also said he and his colleagues had no interest in delaying the trial. All these factors contributed to an atmosphere that drove the sides to a settlement.
"It gives (Qualcomm) a period of certainty in time, a predictable cash flow and the ability to continue to innovate as they've always done," he added. "It's also great for their chip business. It creates opportunities to maybe do business with Nokia on the chip side." |
