Nokia Seeks Import Ban of Qualcomm Chips

Nokia Corp., the world's largest mobile phone maker, said Friday that it has asked the United States to ban imports of chipsets made by Qualcomm Inc. along with phones and other products made with those chipsets.

In asking the U.S. International Trade Commission to start an investigation, Nokia claimed that Qualcomm has engaged in unfair trade practices by infringing on Nokia's patents. A 2001 licensing agreement between the two companies, which have been embroiled in a dispute over royalty fees, expired in April.

"We are taking this action to stop Qualcomm's practice of copying Nokia's patented technology, without permission, and making these innovations available to its chipset customers," Chief Financial Officer Rick Simonson said.

Nokia's complaint is part of a multinational legal battle with Qualcomm, the world's No. 2 chipmaker for mobile phones. The announcement comes two months after the same commission banned U.S. imports of new cell phones made with Qualcomm semiconductors because the chips violate a patent held by rival chipmaker Broadcom Corp.

Qualcomm declined to comment on specifics of Nokia's complaint but said it was part of a broader licensing dispute. Nokia is seeking to pay less for rights to Qualcomm technology than it did under the expired 2001 agreement, which has not been renewed.

"Qualcomm is attempting to reach a settlement with Nokia in the most straightforward and timely fashion, ensuring both sides get a fair, competitive deal," Qualcomm spokeswoman Bertha Agia said. "This is why we are attempting to resolve the core issues through arbitration rather than through further litigation."

Smith Brittingham, a Washington, D.C., patent attorney, said Nokia may be striking back for a complaint that Qualcomm filed before the ITC in June 2006, seeking an import ban on Nokia products that it said violated its patents. A hearing in that case is scheduled Sept. 10.

"Nokia may feel that it needs to have some counterweight to better its position," said Brittingham, who is opposing Nokia in an unrelated case before the ITC. "Most companies feel it makes for a better negotiation where both sides have some risk."

In June, the ITC banned some high-end phones that contain Qualcomm chips after finding that Qualcomm violated a Broadcom patent for conserving battery power. Brittingham said Nokia may seek a similar penalty, which would stay in effect even if Broadcom settled with Qualcomm or with carriers and manufacturers that use its chips.

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Nokia and Qualcomm have sued each other in Texas. Qualcomm has also charged Nokia with patent infringement in a U.S. court in San Diego and in courts in Britain, France, Germany and Italy.

The legal skirmish dates to October 2005, when Nokia and five other companies complained to the European Union about San Diego-based Qualcomm's business practices. The commission is considering the complaint.

Simonson said Qualcomm's recent legal defeats are working in Nokia's favor. "They're losing on the things that are very similar to the complaints we are filing," he said.

Qualcomm's general counsel Lou Lupin resigned earlier this week following a series of legal setbacks in the company's patent wars against Nokia and Broadcom.

U.S.-traded shares in Nokia, based in Espoo, Finland, increased $1, or 3.5 percent, to close at $29.40, while Qualcomm shares rose 61 cents, or 1.6 percent, to end at $37.54.

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Associated Press Business Writer Elliot Spagat in San Diego contributed to this report.

This article Nokia Seeks Import Ban of Qualcomm Chips was originally published in The Sydney Morning Herald.

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