Qualcomm patent ruled invalid in German Nokia case

A view of one of Qualcomm's many buildings in San Diego, California, July 22, 2008. Investors in Qualcomm, already expecting strong quarterly results July 23 for the wireless chip and technology supplier, will likely be focusing on its current quarter forecasts and its court case with Nokia in Delaware on the same day.

HELSINKI (Reuters) - The German Federal Patent Court ruled on Wednesday that a Qualcomm Inc (QCOM.O) GSM patent asserted in a case against the world's top cell phone maker Nokia (NOK1V.HE) was invalid.

The companies have been at legal loggerheads since failing to renew a technology license pact that expired on April 9, 2007.

Analysts estimate that Nokia pays around $500 million a year for the use of Qualcomm patents and it wants to reduce the sum.

Qualcomm says Nokia can continue to pay the same rate of almost 5 percent of phone prices, but Nokia says the rate should be less as it has now free license to Qualcomm's early patents, for which it paid $1 billion over 15 years.

"We absolutely dispute it," said Qualcomm Vice President Bill Davidson.

A key court case that could help solve the argument was due to start on Wednesday in the United States but was postponed for the day after a Delaware court official said the court was having "network problems."

Representatives of the companies at the court denied knowledge of any settlement of the case.

The Delaware court is to decide on the interpretation of standards-setting regulation and on the Nokia-Qualcomm cross-licensing deal.

In April 2007 Nokia offered to continue paying $20 million per quarter, but Qualcomm declined the offer.

The two sides have until the end of 2008 to agree on the new deal.

"We are asking the judge to say, because Nokia is stealing food off the shelf right now and not paying for it, that by continuing to ship products, in fact they are licensed," Davidson said.

SIDE BATTLE

A spokeswoman for the German court confirmed the decision on the patent's invalidity after Nokia first announced it. "This is the third court to conclude that Qualcomm's patent claims against Nokia are without merit," Nokia said.

Qualcomm has filed 11 lawsuits on three continents against Nokia since 2005 claiming the Finnish firm has infringed its patents in mobile phones based on GSM technology, the larger rival to Qualcomm's CDMA technology.

So far the U.S. International Trade Commission and Britain's High Court have decided the patents have been either invalid or not infringed.

"Today's decision is further evidence that Qualcomm does not have relevant and valid GSM patents and that it overstates its role as a wireless innovator," Nokia said.

A hearing on a second Qualcomm patent in the German court case is scheduled for October.

In late afternoon Nasdaq trading, Qualcomm shares were up 0.2 percent to $44.20. Nokia shares gained 0.06 percent in Finland.

(Additional reporting by Agnieszka Flak and Diane Bartz; Editing by Gerald E. McCormick/Richard Hubbard)