Nokia-Qualcomm licence deal runs out

A key licensing agreement between the world's number one mobile handset maker Nokia and mobile giant Qualcomm - which has prompted a bitter court battle between the two - has expired this week.

The agreement, under which Nokia licensed patents pertaining to the CDMA and W-CDMA mobile standard, has been the subject of protracted legal wrangling between the two. The licensing deal officially ran out on 9 April.

Qualcomm has now filed an arbitration demand with the American Arbitration Association, claiming Nokia's continued use of the Qualcomm-patented technology in handsets constitutes an acceptance by the handset maker to continue licensing the patents. As such, the arbitration demand states Nokia must continue its payments to Qualcomm.

The arbitration demand requests Qualcomm's right to terminate all of Nokia's patents rights and licences if the Finnish manufacturer sues Qualcomm for patent infringement after 9 April.

Nokia last week made a royalty payment to Qualcomm of $20m, which it said would cover patent licensing for the second quarter of this year.

But the payment has not been entirely welcomed by Qualcomm, which said: "Nokia has no more right to unilaterally set a price than the average consumer has a right to walk into a store, take a product off the shelf, and walk out with it after leaving only a fraction of the established price on the counter. Leaving some money on the counter does not make the act any less unlawful."

A Nokia spokesman told silicon.com the two mobile giants are still talking and hope to come to a timely resolution. "These types of negotiations take time and it would be premature to speculate on the outcome while we are in negotiations," he said.