Nokia and Qualcomm on Wednesday announced the settlement of all litigation in their long-running dispute over licensing of their respective patents.
In an unexpected breakthrough, the world’s leading handset maker and the biggest maker of chips for mobile phones said they had entered into a 15-year agreement covering a wide range of mobile standards.
“The agreement will result in settlement of all litigation between the companies, including the withdrawal by Nokia of its complaint to the European Commission,” the companies said in a joint statement.
Under the terms of the deal, Nokia has been granted a licence under all Qualcomm’s patents for its mobile phones and network equipment. It has agreed not to use any of its patents directly against Qualcomm, allowing Qualcomm to integrate Nokia’s technology into Qualcomm’s chipsets. The details of the new cross-licensing agreement were not revealed but include an upfront payment and ongoing royalties for Qualcomm.
Nokia said it had agreed to assign ownership of a number of patents to Qualcomm, including patents declared as essential to 2G, 3G and even 4G standards – GSM, WCDMA and OFDMA.
“We believe that this agreement is positive for the industry, enabling the market to benefit from innovation and new technologies,” said Olli-Pekka Kallasvuo, Nokia chief executive.
“The positive financial impact of this agreement is within Nokia’s original expectations and fully reflects our leading intellectual property and market positions.”
Paul Jacobs, chief executive of Qualcomm, said: “I’m very pleased that we have come to this important agreement. The terms of the new licence agreement, including the financial and other value provided to Qualcomm, reflect our strong intellectual property position across many current and future generation technologies. This agreement paves the way for enhanced opportunities between the companies in a number of areas.”
Qualcomm shares had risen 10 per cent in extended trading as speculation mounted that a settlement was close in the dispute.
Later, Qualcomm failed to post its third-quarter earnings report after the market closed.
It apologised for the delay and said the release had been rescheduled for Thursday.
Qualcomm had said Nokia, in effect, extended a licensing agreement that partly expired in April last year, while Nokia has complained that Qualcomm had not been fair and non-discriminatory in the royalties it charged for its patents.
In early trading on Thursday shares in the Nokia were up 2.24 per cent, or €0.38, at €17.34.