2nd UPDATE: Nokia Wins UK Court Ruling Against Qualcomm
Monday March 3rd, 2008 / 12h29
(Adds analyst and executive comment.) By Daniel Thomas Of DOW JONES NEWSWIRES LONDON -(Dow Jones)- U.S. mobile technology firm Qualcomm Inc. (QCOM) faced another blow in its legal battle against handset maker Nokia Corp (NOK) on Monday, after a U.K. High Court Judge ruled that its claims over patent infringements are invalid. The U.K. High Court ruled in favor of Nokia, the world's largest mobile phone maker by sales, saying it hadn't infringed two patents regarding GSM mobile phone standards. Qualcomm had been trying to bring an injunction against Nokia, that would have stopped it from selling products using the GSM patents in the U.K. GSM, or Global System for Mobile Communications, is the world's dominant second-generation mobile phone technology standard. Qualcomm, which has filed 11 lawsuits around the world against Nokia in the past two years, has failed to win any legal action against the Finnish handset maker. "We are pleased with the Court's decision that the patent claims are invalid and believe it is consistent with and supported by the facts," said Nokia Chief Financial Officer Rick Simonson. "This is the second court to conclude that Qualcomm does not have relevant and valid GSM patents." Last week, the U.S. International Trade Commission ruled against Qualcomm's petition for a review of an earlier decision, which said Nokia hadn't infringed three patents, as claimed by Qualcomm. The two mobile phone-technology giants have been fighting legal battles for a number of years now, over issues relating to a patent-licensing agreement which expired in April last year. Qualcomm charges patent royalties to mobile phone makers, which Nokia and some other companies contend are excessive. Richard Windsor, an analyst at Japanese investment bank Nomura said that, overall, the ruling didn't carry that much significance, with the main focus being on the Delaware Court 3G patent dispute, where proceedings are expected to commence in July. "Qualcomm is weak in GSM and we think it has been deploying a strategy of firing out legal long-shots," said Windsor. "The hope is that a victory in one of these cases will bring Nokia to the negotiating table, but, so far, it's not achieved this." "The main focus now is going to be the Delaware case in July," said Windsor. "However, it's our view that Qualcomm is unlikely to prevail in that case either." Andrew Gilbert, President of Qualcomm in Europe, said: "Although it's always disappointing to lose something, it's not devastating." Qualcomm's disputes around second generation GSM technology are a side issue to its court case with Nokia in Delaware over 3G technologies, said Gilbert. Both companies have agreed to temporarily put on hold other patent infringement lawsuits pending court proceedings in the Delaware Chancery Court, which are expected to begin at the end of July. "I think a sense of reason has ensued and we're confident of the vice chancellor's and the court's ability to expedite this case," said Gilbert, in an interview with Dow Jones Newswires. "It would be good for us, Nokia and the industry to resolve this as soon as possible," he said. Qualcomm is actively considering whether to seek permission to appeal the U.K. High Court's ruling, said Gilbert. At 1050 GMT, Nokia shares were down EUR0.69 or 2.9% at EUR23.40 in a broadly lower Helsinki market. Company Web site: http://www.nokia.com Company Web site: http://www.qualcomm.com -By Daniel Thomas, Dow Jones Newswires; 44-20-7842-9264; dan.thomas@dowjones.com
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