Qualcomm has snubbed a $20 million royalty payment from Nokia, scuppering a chance to resolve their ongoing patent dispute.
A series of long-term licensing agreements between the companies expired on Monday. Nokia said last week that it had paid Qualcomm $20 million to cover licenses for 3G mobile phone technology through the end of the current quarter on 30 June. However, the payment was not to extend the deal that expired Monday, Nokia said.
Qualcomm told Nokia on Wednesday that it had turned down the money "and the accompanying multiple pages of terms upon which Nokia conditioned its payment," Qualcomm said.
"Both the amount of the payment and the terms that Nokia sought to unilaterally impose in connection with it are at odds with the parties' 2001 license agreement," Qualcomm said.
The companies are battling in court and the media over Nokia's licences to use technology developed by Qualcomm, the San Diego company that pioneered CDMA (Code-Division Multiple Access) and sells chips using a wide variety of mobile technologies.
Last week, Qualcomm sued in the US to stop Nokia from selling GSM, GPRS and EDGE phones because it said those products infringed on Qualcomm patents. The company has similar suits in progress in the UK, France, China and other countries.
The two companies seem to interpret the $20 million payment in different ways.
Nokia said that the offer was a testament to its commitment to continue negotiating in good faith. It was for possible future use of some Qualcomm patents licensed through the European Telecommunication Standards Institute (ETSI) for the rest of this quarter, spokeswoman Laurie Armstrong said.
Qualcomm called it one of several acknowledgements by Nokia that it continues to use the patents and has to pay for them.
"I think it amounts to an admission that they continue to use our patents," Qualcomm general counsel Lou Lupin said last week. "If they are, and they don't abide by the terms of our agreement, then they're unlicensed and infringing. Under US law, that's willful infringement, and the finding in the US could be triple damages and other remedies and attorney fees."
In rejecting the payment, Qualcomm said it represents just a fraction of the royalties to which Nokia has agreed and of the value of Qualcomm's patent portfolio.
The two sides continue to talk, Derek Aberle, senior vice president and general manager of Qualcomm's licensing business, said yesterday.
"We remain far apart, and we've got some significant differences of opinion at the moment," Aberle said.
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