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Nokia ratchets up legal tussle against Qualcomm with Euro filings

Nokia Corp. is asking European courts to declare Qualcomm Inc.’s patents in Europe “exhausted,” freeing the Finnish mobile phone maker to sell handsets in Europe containing chips by Texas Instruments Inc. on which Nokia otherwise would owe royalties to Qualcomm.
Nokia cited a patent portfolio license between Qualcomm and TI, made in 2000, that appeared to be the legal justification for the phone maker’s request to two European courts, one in Mannheim, Germany, the other in the Hague District Court in The Netherlands.
The move appeared to be a contingency against the possible failure of Nokia and Qualcomm to reach a new cross-licensing agreement; the current agreement expires on April 10. Conflicting statements by the two companies on their respective stances as they approach the April 10 deadline to renew an agreement, as well as the complexity of the issues and the secrecy surrounding their negotiations, make it difficult for analysts to gauge progress on the issue.
In its statement today, Nokia added that it has invested nearly $40 billion in research and development for creating GSM and W-CDMA technologies in 11,000 patent families, a reflection of its arguments in dealing with Qualcomm on cross-licensing-that is, that the phone maker’s R&D investments and number of patents should count more heavily in a new agreement than Qualcomm is willing to recognize.
Qualcomm did not immediately issue a statement regarding the new Nokia complaints.
The San Diego-based chip company did, however, issue a statement late on Friday-along with rival Broadcom Corp.-that the two companies had agreed to dismiss without prejudice all remaining patent-related claims initiated by Qualcomm in San Diego District Court and Broadcom’s counter-claims in those cases. Qualcomm and Broadcom also agreed to dismiss with prejudice all trade secret misappropriation claims asserted by either party in two cases pending in San Diego Federal Court. The agreement eliminates the need for five separate jury trials, one of which would have begun today.
Albert Lin, analyst at American Technology Research, wrote this morning in a note to investors that the two companies’ unresolved legal issues have hurt their share prices and, thus, their overall market capitalization, which he said should recover to some degree with the settlements. Lin said he expected similar agreements between the companies on outstanding issues.
The two companies still have a number of lawsuits and complaints pending between them, which are unaffected by Friday’s agreement, including a patent infringement case before the United States International Trade Commission with a public hearing set for Wednesday and Thursday, a U.S. District Court case over patent infringement allegations scheduled for trial in May, a U.S. District Court ruling on video compression and standards abuse over six patents, and a U.S. District Court of Appeals antitrust claim.
Wall Street apparently likes companies that take tangible steps to avoid impediments to conducting business. Shares in Nokia, Qualcomm and Broadcom all rose slightly on the news announcements.


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