Nokia Has Paid $1 Billion To Qualcomm For Tech Patents

Qualcomm may lose clout and royalities thanks to the recently created Next Generation Mobile Networks 4G patent pool.

As new cell phone infrastructure technologies are introduced, handset manufacturers and service providers are placing new emphasis on intellectual property assets -- who owns them and how much they are worth.

In court documents revealed this week, Nokia (NYSE: NOK) said it has paid about $1 billion for full access to Qualcomm's extensive patent portfolio over a 15-year period. Nokia has been complaining for years that Qualcomm charges too much for its intellectual property and the two companies are scheduled to meet in a Delaware Court this July to work out their differences.

Nokia maintains in court filings that it is paid up for its use of Qualcomm IP, although the Qualcomm doesn't agree. As much of the value of early wireless patents fades away, attention is turning to the recently created Next Generation Mobile Networks (NGMN) 4G patent pool.

Led by Intel (NSDQ: INTC) and Samsung, the NGMN appeals to smaller wireless companies that don't have the resources to enter into wireless patent battles. New cellular companies also tend to find it difficult to figure the IP costs of entering markets.

"The combined effect of NGMN reporting and a 4G patent pool will create a situation where there will be an evident divide between the patent pool rates reported, and royalty rates reported from the rest," said Stuart Carlaw, ABI Research's VP and research director, in a statement Friday. "This will expose Qualcomm's position to the public gaze," he said. ABI noted that the average cumulative royalty rate in cellular technology has been secret.

ABI indicated Qualcomm should be "worried" by the creation of the NGMN, because it could marginalize Qualcomm's IP position.

"The key concepts here revolve around the independent reporting of royalty rates to the NGMN and also the ability of a patent pool to report en masse," said Carlaw.

via InformationWeek