Nokia 2007 Annual Report Download - page 124

importation and sale in the US. In this situation, IDT has committed itself to grant a license on fair,
reasonable, and nondiscriminatory terms with regard to the patents in suit. The hearing on this case
is scheduled to begin on April 21, 2008 with an initial determination currently scheduled for July 11,
2008 and a final determination currently scheduled for November 11, 2008.
We have also filed a motion in the Southern District of New York court to prevent IDT from proceeding
with its claim in the ITC. We believe the patents at issue are also licensed to us as part of an R&D
agreement signed in 1999. Although IDT disagrees, any license dispute under the R&D agreement is
subject to resolution through arbitration. We are vigorously defending ourselves in these disputes.
Qualcomm
Our payment obligations under the old Qualcomm subscriber unit crosslicense agreements with
Qualcomm Incorporated (“Qualcomm”) expired on April 9, 2007. We are now in negotiations with
Qualcomm about a new crosslicense agreement with the intention of reaching a mutually acceptable
agreement on a timely basis. Our intention is to negotiate a new crosslicense agreement based on
today’s business realities, including the current value of Qualcomm’s newer patent portfolio and
Nokia’s IPR position in relevant technology standards. The wireless industry landscape has changed
significantly since the terms of our previous agreement were set, and we believe that any new
agreements must reflect the realities of today including the fact that we are discussing different
patent assets than in the old agreements, as the early patents—CDMA fundamentals as referred to by
Qualcomm—are fully paidup by Nokia. Although we hope for an out of court resolution to the patent
disputes we have with Qualcomm, we also recognize that we may have to prove the merits of our
claims and the falsity of the claims of Qualcomm, through proof in courts on a patentbypatent basis
in the relevant countries.
Nokia and Qualcomm currently have pending legal disputes in the United States, Europe and China. In
November 2005, Qualcomm and its whollyowned subsidiary Snap Track, Inc. filed a patent infringe
ment suit against Nokia Corporation and Nokia Inc. in the Federal District Court for the Southern
District of California. The lawsuit currently involves five patents that Qualcomm apparently contends
apply to the manufacture and sale of unidentified GSM products. Nokia and Qualcomm have since
agreed to stay the case pending the final outcome of an ITC investigation filed by Qualcomm against
Nokia. We are vigorously defending ourselves against these claims.
In May 2006, Qualcomm additionally filed a patent infringement lawsuit against Nokia in the United
Kingdom. This lawsuit involved two European patents (United Kingdom) that Qualcomm apparently
contended 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. On
March 3, 2008, a United Kingdom High Court judge issued a ruling in favor of Nokia which determined
that all of the asserted GSM patent claims of Qualcomm were invalid. This ruling is subject to
potential appeals.
In June 2006, Qualcomm filed a complaint against Nokia in the ITC seeking an order forbidding the
importation of our GSM handsets into the United States. The ITC instituted an investigation in July
2006. The trial was held in September 2007. On December 12, 2007, the Administrative Law Judge
issued an initial determination finding all three patents not infringed, and finding one patent invalid.
On February 27, 2008, the ITC decided not to review the Initial Determination of Judge Luckern issued
on December 12, 2007. The decision means that the ITC investigation has now been terminated. This
ruling is subject to potential appeals. A final determination is expected April 14, 2008.
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. Based on a request from Qualcomm to stay the proceedings, the
court stayed the lawsuit on September 11, 2007 until further notice. The German Revocation Court
will consider our claim that the two patents are invalid in April and June 2008.
In August 2006, Nokia initiated an action in Delaware Chancery Court seeking a declaration that
Qualcomm had breached its contractual obligations concerning patents declared essential to ETSI, a
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