ITC Probes Nokia, Qualcomm

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ITC Probes Nokia, Qualcomm
U.S. International Trade Commission investigates patent infringement complaint.
July 10, 2006
Qualcomm said Monday the U.S. International Trade Commission commenced an investigation Friday into whether Nokia engaged in unfair trade practices by importing and selling mobile phones, devices, and components that infringe on six of Qualcomm’s patents.

Qualcomm filed a complaint on June 9 against Nokia, asking the International Trade Commission (ITC) to issue an exclusion order that would bar imports of Nokia phones and products it claims infringe on its patents.

Qualcomm, based in San Diego, has also asked for a cease-and-desist order that would prevent further sales of the Finnish phone maker’s products that have already been imported into the United States.

Bill Plummer, Nokia’s vice president of external affairs said the company plans to fully cooperate with the ITC, but that Nokia believes the filing by Qualcomm is “without merit.” He insisted that Nokia has a long history in the wireless business and has respected other companies’ “valid intellectual property.”
Qualcomm disagrees. “We don’t want them to sell phones that infringe our patents,” said Jeremy James, senior director of corporate communications at Qualcomm.

The case has been referred to Robert L. Barton Jr., a presiding administrative law judge with the ITC. He will set a schedule within 45 days for the hearing, said Peg O’Laughlin, a spokesperson for the ITC.

“Basically what will happen is that within 45 days, he will set a schedule and will set out the target dates for the initial judge’s determination,” she said. “Once it’s instituted it gets assigned to an administrative law judge and then the judge institutes an initial determination that is subject to review by the commission, and a target date for the commission’s final action.”

Judge Barton’s initial determination is expected to be issued in the first half of 2007.

The ITC is investigating mobile phones, mobile e-mail devices, personal digital assistants, smart phones, and smart cards that may have infringed the patents. Qualcomm alleges that Nokia infringed the Tariff Act of 1930.

Nokia shares fell $0.04 to $19.50 in recent trading, while Qualcomm shares rose $0.06 to $38.06.

Patent Suits Flying
On top of the ITC case, Qualcomm also filed a patent lawsuit against Nokia in the United Kingdom in May (see Qualcomm Sues Nokia). That case involves two Qualcomm patents in the U.K.

In addition to those two cases, Qualcomm and its SnapTrack subsidiary filed suit against Nokia in a San Diego federal court in November, claiming Nokia infringed 11 of Qualcomm’s patents and one of SnapTrack’s patents. Qualcomm included three of the patents in its ITC complaint as well.

Qualcomm claims it has offered to license its patents, which involve the GSM, GPRS, and EDGE wireless technologies, to Nokia under terms that it calls “fair, reasonable, and free from unfair discrimination.”

The company said Nokia has spurned the offer, continued to sell allegedly infringing products, and forced Qualcomm to pursue litigation.

Mr. Plummer of Nokia disputed that the terms of the Qualcomm deal fit the description as Qualcomm characterized them. “We license intellectual property on fair, reasonable, and nondiscriminatory terms,” he said.

Mr. Plummer contends that Qualcomm is concerned about the growth of 3G (third-generation) wireless technologies that don’t rely as heavily on its patents as its CDMA (code division multiple access) technology.

“This serial ambush on the GSM technologies that have been on the market for years reflects Qualcomm’s concern with the ongoing patent negotiations for 3G wideband CDMA,” he said.

“This repetitive legal and media action is a reflection of Qualcomm’s worry that the conditions have fundamentally changed from when they had a dominant position with CDMA. They are trying to project that dominant position into wideband CDMA, where they don’t have that position,” he added.

While Qualcomm’s intellectual property is mostly associated with the CDMA standard, Mr. James of Qualcomm claimed that Nokia’s implementations of other standards have leveraged Qualcomm’s CDMA technology and therefore infringe on Qualcomm’s patents.

“In this instance we are saying that devices Nokia sells to support the GSM, GPRS, and EDGE standards infringe our patents,” he said. “As that family of standards continued to be developed, the techniques that were deployed in further development of those standards originate in CDMA.”

He claims Nokia has been losing market share in the 3G phone market as more companies have introduced phones that have taken advantage of CDMA 2000 and WCDMA technologies.

Mr. James defended Qualcomm’s contention that its licensing terms are fair, reasonable, and non-discriminatory by pointing out that 60 companies are licensing Qualcomm’s WCDMA technology.

However, other companies have complained of Qualcomm’s tactics on licensing its patents, which cover a wide breadth of wireless technologies, including the CDMA standard.

Nokia and five other chip and equipment makers, including Texas Instruments, Broadcom, Ericsson, NEC, and Panasonic Mobile Communications, filed complaints in October against Qualcomm with the European Commission saying the company has not played fair in negotiating licensing arrangements