Qualcomm Sues Nokia Over Patents

Wireless technology company Qualcomm Inc. (QCOM) has filed a lawsuit against mobile giant Nokia (NOK) accusing it of infringing a dozen patents related to the most widespread cell phone standard.

Qualcomm said on Monday it wanted Nokia, the world's No. 1 mobile phone maker, to stop selling or producing products in the United States designed for GSM mobile phone networks (search) and that it was demanding financial damages from the Finnish mobile firm.

The suit comes just days after Nokia and five other high technology companies complained to the European Commission (search) about Qualcomm's market practices, accusing it of stifling competition in the third-generation mobile phone chip market. Qualcomm rejected the accusations.

A Nokia spokeswoman said the company had no immediate comment on the Qualcomm lawsuit, which was filed in San Diego Federal Court (search) on Nov. 4.

Qualcomm dominates the market for technology and chips for CDMA, the mobile phone technology it invented. It said Nokia has used some of Qualcomm's CDMA technology to improve GSM networks so that they too could achieve faster speeds for data services such as video calls and Internet downloads.

GSM, short for Global System for Mobile Communications, has become the dominant mobile phone standard and is used in about two out of every three handsets in the world. The CDMA standard is mostly used in the Americas and parts of Asia.

Shares in Nokia were down 0.4 percent at 14.40 euros by 1343 GMT, compared to a DJStoxx tech index 0.1 percent lower.


Qualcomm accused Nokia of infringing its patents by making or selling products in the United States that comply with GSM standards. It said the lawsuit affected 11 Qualcomm patents and one belonging to its wholly owned subsidiary, SnapTrack Inc.

"Until recently, we had been led to believe that these issues might be resolved cooperatively and amicably," Qualcomm lawyer and Senior Vice President Louis M. Lupin said.

"However, it now appears that a cooperative resolution of these issues is quite unlikely and we must move forward with the litigation in order to protect our rights and to get these issues resolved," Lupin added in a statement.

Nokia and other companies, including Broadcom and Texas Instruments as well as Ericsson of Sweden complained to the European Commission last month about Qualcomm.

They said it offered preferential terms on royalties of technology patents to manufacturers who also bought its chipsets — hardware inside a mobile phone — and stifled competition, accusations Qualcomm rejected.

All mobile phone chip and handset makers need Qualcomm's CDMA technology for the third-generation successor to GSM, which is called Wideband-CDMA (W-CDMA) and UMTS.

Nokia, Ericsson and others say they have contributed significantly to the W-CDMA standard and also expect royalties, which may be hard if Qualcomm sticks to its licensing terms, which Nokia said are "not fair and reasonable."

Nokia has a rocky relationship with Qualcomm. It has struggled for years to get a share in the CDMA mobile market equal to its chunk of GSM sales by using its own CDMA-designed chips rather than Qualcomm's, but has so far failed.

Virtually all its rivals in the CDMA market use Qualcomm chips.