KANATA, Canada — The announcement this week of an intellectual property agreement between Qualcomm and Nokia is one that has the industry buzzing, with implications not only for the two companies involved, but also for the intellectual property (IP) and wireless communities at large, as well as the consumer.
Qualcomm and Nokia have come to a 15-year licensing agreement that effectively ends over three years of litigation fought over three continents that had all those involved in telecom worried what the ripple effect of a judge-ordained decision could have. This landmark decision has yet to be commented on by the two parties involved but essentially involves Nokia paying a settlement and ongoing royalties to utilize Qualcomm intellectual property (IP).
This is definitely a monumental day for those in the IP community as all parties were carefully observing any and all legal activity from both sides. This sudden announcement of this agreement between Qualcomm and Nokia definitely caught industry analysts by surprise as many predicted a long and drawn out battle with neither side backing down from their arguments.
From the perspective of the cellular industry, the news is well received as there was definitely potential for an unfortunate ripple-down effect on their market that could have resulted from a judge’s verdict. The agreement also has importance as an example of two large corporations coming to an understanding on the importance of IP assertion and protection.
The announcement also had a residual effect on investors as Qualcomm stock rose from 18 percent to 20 percent compared to pre-announcement levels as the removal of this legal threat removed investor doubt on the company. Nokia experienced growth in value, seeing their shares rise as well.
What does this mean to the consumer? This new agreement between Nokia and Qualcomm opens the door for Nokia to potentially use Qualcomm devices in any new system designs going forward. Nokia would now be able to take advantage of Qualcomm’s wireless CDMA-standard technology in the United States and globally, creating a new source of potential revenue in a market-share they could not have access to before.
This could mean a whole new catalog of mobile phones from Nokia powered by Qualcomm. This, in turn, means new designs from Nokia’s engineers.
From an industry perspective, both parties won by coming to a resolution that benefits both sides. Qualcomm receives what they see as fair payment for their IP and Nokia reserves their right to continue to use said property and now have access to even more of Qualcomm’s technology reserve.
— Allan Yogasingam is a technology analyst at TechOnline.
