Nokia 2006 Annual Report Download - page 113

terms also resolved disputes related to all Nokia products up to the agreement date. The USD
253 million payment required under the settlement terms was in line with Nokia’s earlier provisions
for this legal dispute. Further, the settlement terms also resolved a pending legal action in the
United Kingdom involving IDT’s alleged 2G patents. The IDT settlement terms did not address any
prospective 3G license terms, however, Nokia’s sale of 3G products was fully released thru the date
of the settlement agreements. Additionally, IDT agreed not to initiate patent infringement claims
against Nokia prior to January 1, 2007. Notably, Nokia and IDT currently have pending legal disputes
in the United States and United Kingdom regarding IDT’s alleged 3G patents and certain Nokia
patents declared essential to 3G, and the settlement terms did not have any impact on those
pending disputes. Nokia will vigorously defend itself in these disputes.
In November 2005, Qualcomm Incorporated (‘‘Qualcomm’’) and its whollyowned subsidiary Snap
Track, Inc. filed a patent infringement suit against Nokia Corporation and Nokia Inc. in the Federal
District Court for the Southern District of California. The lawsuit involves twelve patents that
Qualcomm apparently contends apply to the manufacture and sale of unidentified GSM products. On
December 20, 2005, Nokia moved to stay the lawsuit pending resolution of a confidential arbitration
pending between Nokia and Qualcomm. That lawsuit remains stayed in light of the arbitration. A
hearing in the confidential arbitration is currently set for March 2007. Nokia will continue to
vigorously defend its rights in these actions.
In May 2006, Qualcomm additionally filed a patent infringement lawsuit against Nokia in the United
Kingdom. This lawsuit involves two European patents (United Kingdom) that Qualcomm apparently
contends apply to the manufacture and sale of GPRS phones capable of operating in accordance with
the GPRS and/or EDGE standards and not having a capability to operate with CDMA technology. Trial
on infringement, validity and essentiality of the patents in suit is currently set for July 2007. Trial on
relief and other issues, if appropriate, will be held some time thereafter. Nokia will vigorously
defend itself against these claims.
In June 2006, Qualcomm also filed a complaint against Nokia in the International Trade Commission
(the ‘‘ITC’’) seeking an order forbidding the importation of Nokia’s GSM handsets into the United
States. The ITC initiated a proceeding in July 2006. In November 2006, Nokia filed a motion to
terminate the investigation as to the 3 patents remaining in the action on the grounds that the ITC
lacks jurisdiction to hear the claims and that Qualcomm had waived its rights to seek injunctive
relief. The ITC denied Nokia’s motion in December 2006, and Nokia has sought leave to appeal this
decision. The initial hearing in this action is currently scheduled for March 2007, with a final
determination by September 2007. Nokia is seeking to stay the proceedings in light of the
confidential arbitration referenced above. Nokia will vigorously defend itself against these claims.
In August 2006, Qualcomm filed a patent infringement lawsuit against Nokia in Germany. This
lawsuit involves two European patents (DE) that Qualcomm apparently contends apply to the
manufacture and sale of certain GPRS phones. Nokia is currently set to file a defense in February
2007. Nokia will vigorously defend itself against these claims.
In August 2006, Nokia initiated an action in Delaware Chancery Court seeking a declaration that
Qualcomm had breached its licensing obligations concerning declared essential GSM/GPRS/EDGE and
WCDMA patents by failing to offer fair, reasonable and nondiscriminatory (‘‘FRAND’’) terms and
asked the Court to declare that injunctions are unavailable for patents that Qualcomm has voluntarily
declared essential to the ETSI standard setting organization. Nokia has also asked the Delaware Court
to enjoin Qualcomm from requesting injunctive relief in the actions Qualcomm has filed outside the
United States involving patents it voluntarily declared essential to ETSI. In addition, Nokia has
requested the Court to specify the proper framework for determining the FRAND terms and to order
specific performance requiring Qualcomm to negotiate in good faith based on the FRAND framework
as determined by the Court. Qualcomm has moved to dismiss this action on multiple bases, which
Nokia has refuted, and the parties are currently waiting for the Court to issue its ruling. Trial is
scheduled for July or August 2007. Nokia will continue to vigorously defend its rights in this action.
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