Nokia Pays Qualcomm $20m for UMTS

Although it means essentially nothing to the ongoing litigation between the two companies, Nokia said Thursday it had made a $20 million payment to Qualcomm for the use of its UMTS patents.

The company also plans to make future payments and would announce them as necessary. Nokia said the payments do not extend an agreement over patents that partially expires on April 9.

It noted that most of Qualcomm's UMTS patents exist only in the United States, and in many of Nokia's biggest markets for the technology, Qualcomm holds few or no patents.

Nokia said the payments are for licenses that Qualcomm provides through the European Telecommunication Standardization Institute (ETSI), which controls UMTS. It feels the sum is fair, and said it is well positioned to offset claims by its competitor to ask for more money.

Additionally, with the agreement's expiration, several of the earliest patents would also expire as well, meaning Qualcomm could no longer collect royalties on the technology.

"It is important to note that as of April 9, 2007, Qualcomm's entire chipset business becomes exposed to Nokia's extensive GSM, WCDMA and CDMA patent portfolios and Nokia will use all rights from those portfolios when defending itself against any new Qualcomm litigation," Nokia chief financial officer Rick Simonson warned.

Thursday's announcement is only the latest in a string of suits and public relations efforts by both companies.

Most recently, Qualcomm added five additional claims to its patent infringement suit against Nokia earlier this week. Prior to that, Nokia filed suit in the Netherlands and Germany in March arguing that Qualcomm was attempting to get paid twice for use of its technologies.