Qualcomm seeks arbitration as Nokia deadline looms

New York: Qualcomm on Thursday asked arbitrators to intervene in its legal fight with No 1 mobile phone maker Nokia, saying it was unlikely the two companies could reach an agreement on a key licensing pact due to expire this week.

The agreement over technology patents between wireless chip maker Qualcomm and Nokia expires on Monday, but an increasingly bitter battle over fees for the technology has reinforced investor fears that they will fail to reach a new deal.

Both companies fired new shots in the legal dispute on Thursday, which centres on Nokia's use of Qualcomm patents for WCDMA, a technology popular in the United States for mobile phones with high-speed web links.

Qualcomm asked the American Arbitration Association to rule that Nokia's use of its patents after April 9 would amount to a choice by the Finnish company to extend their existing pact and pay the same royalty rate.

Nokia, which has been arguing for lower royalty fees, said earlier in the day it had paid $20 million to use Qualcomm's patents in the second quarter. Qualcomm dismissed the payment as a fraction of what it should receive.

Some analysts say it is unlikely that even arbitration could help the companies at this stage, while others expect a flurry of new lawsuits if no accord is reached by Monday.

"While such an approach is possible down the road, we feel that the companies are currently poles apart and need to get closer before an arbitrator could be effective in closing the gap," Prudential analyst Inder Singh said in a note.

Based on typical arbitration cases, it could take a year to resolve the dispute, said Qualcomm general counsel Lou Lupin. "If they decide not to pay us, it will probably take at least that long, whatever avenues we decide to pursue."