Nokia Corp and Qualcomm Inc said on Wednesday they agreed to settle a high-stakes licensing dispute and end a bitter legal battle that has lasted nearly three years and spanned three continents.
The wireless industry heavyweights said the 15-year licensing deal gives Nokia rights to a wide portfolio of Qualcomm’s patents.
Nokia will pay Qualcomm an upfront sum and ongoing royalties, but the companies did not elaborate on the terms.
The wireless industry heavyweights said the 15-year licensing deal gives Nokia rights to a wide portfolio of Qualcomm’s patents.
Terms were not disclosed.
Nokia, the world’s largest handset maker, said it would withdraw its antitrust complaint against Qualcomm at the European Commission.
Nokia filed the complaint in October 2005 with five other companies, which led to a flurry of lawsuits between Qualcomm and its rivals and several regulatory probes into Qualcomm’s licensing practices.
The agreement, announced after markets closed, impressed Qualcomm investors. The company’s shares soared more than 18 percent, or US$8.38, to US$53.20 in after hours trading.
US traded shares of Espoo, Finland-based Nokia added about US$0.30 after hours.
The stakes were especially high for San Diego-based Qualcomm, the world’s largest maker of chips for cellphones. It gets about two-thirds of its profits from licensing fees on its patents. Nearly all the rest of its profit comes from making chips.
The agreement was announced after a judge in Wilmington, Delaware, delayed the opening day of a trial to address the licensing fees and Nokia’s complaint that Qualcomm has ignored its commitment to license its patents on fair terms.
A licensing agreement between the two companies expired in April last year. The new pact covers a host of technologies that didn’t exist or were in their infancies when the two companies signed their initial agreement in 1992 and renewed it in 2001.
Neither company said much about the likely financial impact.
“The positive financial impact of this agreement is within Nokia’s original expectations and fully reflects our leading intellectual property and market positions,” said Olli-Pekka Kallasvuo, Nokia’s chief executive officer.
Paul Jacobs, Qualcomm’s chief executive officer said, “The terms of the new license agreement, including the financial and other value provided to Qualcomm, reflect our strong intellectual property position across many current and future generation technologies.”
Qualcomm delayed the release of its fiscal third-quarter results for several hours to first announce the agreement with Nokia.
It reported its profits fell 6 percent to US$748 million, or US$0.45 a share, during the three-month period ended June 29, down from US$8 million, or US$0.47 a share, the same period last year. Revenue grew 19 percent to US.76 billion from US.33 billion.
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