Nokia today said it will pay US$235 million to InterDigital Communications to settle a patent dispute. InterDigital however, is of the opinion that the companies have failed to re-negotiate a licensing agreement for the 3G mobile products that Nokia is currently selling.

InterDigital joins Qualcomm among the companies with which Nokia is negotiating new patent licensing agreements.

The settlement with InterDigital ends a dispute between the companies over licenses Nokia requires to sell GSM/GPRS/EDGE (Global System for Mobile/General Packet Radio Service/Enhanced Data Rates for GSM Evolution) phones and network equipment, InterDigital added.

Nokia said it now has a perpetual license to sell those products.

As part of the settlement, Nokia isn't liable for infringing InterDigital patents used in Nokia's 3G phones and network equipment sold before Wednesday, claimed InterDigital.

However, the companies have ended a licensing agreement that was scheduled to expire at the end of this year. That means Nokia's sales of 3G products after Wednesday aren't properly licensed, according to InterDigital said. It said it hopes to continue negotiations with Nokia on a new licensing agreement.

Last week, it emerged that Nokia and Qualcomm were struggling to renew a licensing agreement that expires in early 2007.

Nokia and other vendors have been pushing to force Qualcomm to reduce its royalty rates. Their actions include filing complaints with the European Commission charging Qualcomm with anti-competitive behaviour. Qualcomm denies any wrongdoing.