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Technology Stocks : Nokia Corp. (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (4679)	3/19/2007 3:53:10 PM
From: Eric L	Read Replies (1) \| Respond to of 9255

PJ, the Press, and Analysts on The Expiration of the QUALC0MM/Nokia Cross-License Paul Jacobs, QUALCOMM: "Our business model is creating a lot of competition. Entrenched manufacturers don't like to see that, and they are trying anything they can to slow that virtuous cycle down." John Bucher. BMO Capital Markets: "[The recent actions are] the inevitable posturing of two companies over a license agreement that is due to expire. ... I don't think Nokia is out to break Qualcomm's business model. I think they have a number in mind in terms of what they want to see as a royalty rate. ... For both sides to come together, both are going to have to capitulate a bit." Ed Snyder, Charter Equity Research: "What you're seeing here is Nokia's trying to bust up Qualcomm's monopoly on intellectual property for cell phones. Since we're approaching the April 9 deadline, this seems to say that Nokia is not interested in any settlement that does not cede a lot of ground." >> Nokia-Qualcomm Legal Battle Heats Up Nokia seeks end to Qualcomm's patents; move comes ahead of deadline Dan Gallagher MarketWatch (San Francisco) March 19, 2007 Nokia Corp. fired the latest salvo in its legal war with Qualcomm Inc. Monday, asking European officials to end the latter's patents covering technology used in wireless phones across the globe. The Finland-based wireless gearmaker filed complaints in Germany and the Netherlands, seeking declarations that Qualcomm's European patents have been exhausted. The move was the latest in an escalating battle between the two rivals. Nokia (NOK: Nokia Corp), which is the world's largest maker of wireless handsets, is seeking to break or at least loosen Qualcomm's hold on patents for CDMA, the digital-wireless technology that is becoming the standard in the marketplace. San Diego-based Qualcomm (QCOM: QUALCOMM Incorporated), by contrast, believes that Nokia is trying to destroy its business model, which relies in a large part on royalties generated from its intellectual property. "Our business model is creating a lot of competition," Qualcomm Chief Executive Paul Jacobs said at the company's annual shareholders meeting last week. "Entrenched manufacturers don't like to see that, and they are trying anything they can to slow that virtuous cycle down." Qualcomm had not issued any comment on the recent action by Nokia at press time. It also has filed legal actions regarding its patents against Nokia in several countries, including France, Germany, Italy, Britain and China. Nokia's move comes a few weeks before its current license agreement with Qualcomm ends. Qualcomm has told its investors that it is unlikely the companies will resolve their dispute by April 9, which is when the current deal expires. Analysts were not surprised by the latest move. In an interview, John Bucher of BMO Capital Markets called the recent actions "the inevitable posturing of two companies over a license agreement that is due to expire." Bucher, who has outperform ratings on both stocks, also believes that the companies will reach a settlement sometime in the next four to five months. "I don't think Nokia is out to break Qualcomm's business model. I think they have a number in mind in terms of what they want to see as a royalty rate," he added. "For both sides to come together, both are going to have to capitulate a bit." A more bearish view came from Ed Snyder of Charter Equity Research, who is neutral on Qualcomm but carries a buy rating on Nokia. "What you're seeing here is Nokia's trying to bust up Qualcomm's monopoly on intellectual property for cell phones," Snyder said in an interview. "Since we're approaching the April 9 deadline, this seems to say that Nokia is not interested in any settlement that does not cede a lot of ground." Legal Docket The dispute with Nokia is only one of the many that Qualcomm is battling to protect its patent position. A consortium involving handset makers Nokia and Ericsson (ERIC) as well as chipmakers Texas Instruments Inc. (TXN: Texas Instruments Incorporated) and Broadcom Corp. (BRCM) has filed a complaint over the company's business practices with the European Commission. Qualcomm is also involved in several patent-infringement lawsuits with Broadcom. Over the weekend, the two companies agreed to dismiss several of the cases that have not yet come to trial. Three cases remain between the two, one of which is slated to begin trial on May 1. Another case will go to a hearing this week before the U.S. International Trade Commission. In that case, Broadcom is seeking an injunction against products bearing Qualcomm chipsets -- which it claims infringe on certain of its patents -- from entering the United States. The ITC has set a date of May 8 for its final decision on the case. ### - Eric -

To: Eric L who wrote (4679)	3/20/2007 9:41:40 AM
From: Eric L	Read Replies (1) \| Respond to of 9255

Press Release Bingo QUALCOMM comments ... >> QUALCOMM Responds to Nokia's Latest Maneuver to Delay Judicial Determinations That Nokia's GSM Handsets Infringe QUALCOMM's Patents QUALCOMM PR San Diego March 20, 2007 QUALCOMM Incorporated (Nasdaq: QCOM) today commented on reports that Nokia has filed complaints against QUALCOMM in Germany and the Netherlands. Although QUALCOMM has not seen the complaints, Nokia's press release alleges that QUALCOMM's patents are exhausted with regards to Nokia's products placed on the European market that contain chipsets supplied to Nokia by Texas Instruments. This allegation is entirely meritless. In a ruling in prior litigation between QUALCOMM and Texas Instruments, the Delaware Supreme Court wrote: "To protect its stream of royalties from the hand set manufacturers, QUALCOMM's licenses with integrated circuit manufacturers deny the licensees any so called 'pass through rights' that would otherwise relieve the hand set manufacturers of their obligation to pay CDMA royalties to QUALCOMM." Not only are Nokia's accusations that QUALCOMM's patents are exhausted demonstrably false, they are inconsistent with positions Nokia itself has taken as evidenced by the very fact that Nokia has paid royalties for many years to QUALCOMM on CDMA2000® and WCDMA handsets that incorporate chipsets supplied by Texas Instruments. Nokia's latest contention is also contradicted by Texas Instruments which has publicly acknowledged that its agreement with QUALCOMM does not operate explicitly, impliedly and through patent exhaustion to license or exhaust any patents. Nokia's actions in Germany and the Netherlands are merely the latest in a series of attempts by Nokia to avoid or delay a determination on the merits that Nokia's GSM/GPRS and EDGE subscriber products infringe QUALCOMM's patents. QUALCOMM has sued Nokia for patent infringement in the United States, the United Kingdom, Germany, France, Italy and China, and in the U.S. International Trade Commission. Seeking to postpone a judgment of infringement against its GSM products, Nokia, in every one of these cases, has sought through legal maneuvering to delay the trial on the merits and avoid confronting QUALCOMM's infringement claims head on. QUALCOMM will continue to aggressively prosecute its current infringement cases against Nokia to stop Nokia from infringing QUALCOMM's intellectual property rights (IPR) related to GSM/GPRS and EDGE. Nokia's continuing disregard for QUALCOMM's GSM-related IPR compels QUALCOMM to enforce its patents through litigation. Trials in QUALCOMM's patent infringement cases against Nokia in the United Kingdom and Germany are set for later this year. ### - Eric -

To: Eric L who wrote (4679)	3/21/2007 9:30:15 AM
From: Eric L	Respond to of 9255

Nokia v. QUALCOMM: The Patent Exhaustion Principle ((Germany and the Netherlands) "The exhaustion principle is a fundamental principle in European law, and the courts we have gone to have a strong understanding of the definition and application of the principle, and that's why we've chosen to go there." — Bill Plummer, Nokia — >> Nokia Sues to Stop Qualcomm Double Dipping Michael Hickins Internet News March 20, 2007 internetnews.com Handset vendor Nokia (Quote) announced today that it has asked courts in Germany and the Netherlands to rule that telecommunications technology vendor Qualcomm isn't entitled to royalties on intellectual property for which it has already collected royalties from a third party. Specifically, Nokia is asking the European courts to rule that Nokia doesn't owe Qualcomm royalties on sales of phones containing chipsets manufactured by Texas Instruments, because Qualcomm has already collected royalties on those chipsets. Nokia's claim is based on a legal principle of patent exhaustion. "What we're challenging is whether or not this practice of double royalty is legal," Nokia spokesman Bill Plummer told internetnews.com. Qualcomm said Nokia's position with regards to exhausted patents is "demonstrably false." In a statement, Qualcomm also noted that Nokia has implicitly admitted as much since, in the past, it has paid royalties to Qualcomm on handsets that incorporate chipsets supplied by Texas Instruments. Moreover, Qualcomm has brought suits of its own against Nokia for patent infringement in the United States, Germany, France, Italy and China and has brought a complaint before the U.S. International Trade Commission. Qualcomm said Nokia's actions today "are merely the latest in a series of attempts by Nokia to avoid or delay a determination on the merits that Nokia's GSM/GPRS and EDGE subscriber products infringe Qualcomm's patents." One reason Nokia may have brought its action in Europe is that the exhaustion principle was dealt a blow by federal courts in a 1992 decision explained in this amicus brief brought by the Electronic Freedom Foundation in an unrelated case. But Plummer denied Nokia is venue shopping. "The exhaustion principle is a fundamental principle in European law, and the courts we have gone to have a strong understanding of the definition and application of the principle, and that's why we've chosen to go there," he said. Current Analysis analyst Avi Greengart told internetnews.com that the suit "goes to the heart of how you allocate intellectual property in core technologies that serve markets where multiple parties have invested in and own parts of the technologies." Hanging over these suits and countersuits like an appointment with the dentist is the fact that a large part of the cross-licensing agreements between the two companies will expire on April 9, 2007. Qualcomm's intellectual property is largely in CDMA technology, while most of Nokia's is in GSM. While Nokia has said it will no longer manufacture handsets based on CDMA technology, its new-generation phones based on WCDMA still contain some CDMA technology. The companies are currently negotiating an extension of the agreements so that both sets of technologies can be incorporated into new handsets. The new cross-licensing agreements, if they are reached, will determine how much royalty Nokia would have to pay Qualcomm for its portion of intellectual property contained in those next-generation phones. Plummer confirmed that negotiations on this issue are ongoing but said it would be inappropriate to characterize how they are proceeding. "We remain committed to negotiating in good faith towards a mutually acceptable arrangement that takes into account the relevant intellectual property rights of both parties and the value of those rights in terms of the total," he said. He accused Qualcomm of failing to live up to its commitment to license its technology "on fair, reasonable and non-discriminatory terms." Both parties have a lot to lose if the negotiations fail: Nokia, which could lose significant margins on revenues, and Qualcomm, which has a business model based on licensing technology. "Everyone still needs to remain in business; it's just a matter of what the terms are," said Greengart. ### - Eric -