Wednesday, Finland-based mobile devices maker Nokia Corp. (NOK) and San Diego, California-based Qualcomm (QCOM), manufacturer of digital wireless telecommunications products, entered into a new 15-year agreement, ending all litigations between the companies. Nokia will also withdraw its complaint to the European Commission. Following the deal, Qualcomm surged 18.7% in after-hours trading
As per the terms of the new agreement, covering standards like GSM, EDGE, CDMA, WCDMA, HSDPA, OFDM, WiMAX, LTE and other technologies, Nokia gets a license to use all Qualcomm's patents in its mobile devices and Nokia Siemens Networks infrastructure equipment. But Nokia will not use any of its patents directly against Qualcomm. This will enable Qualcomm to integrate Nokia's technology into its chipsets.
The financial terms of the agreement were not disclosed, but the settlement envisages an up-front fee and on-going royalty payments to Qualcomm. Additionally, Nokia has agreed to assign ownership of a number of patents to Qualcomm, including patents declared as essential to WCDMA, GSM and OFDMA.
The companies have been spending a fortune on litigation in multiple jurisdictions and the announcement came in after the delay earlier in the day of the expected start of a key court case between the two companies in Delaware and the postponement of Qualcomm's earnings release and conference call right after the market close.
Qualcomm closed Wednesday's regular session at $44.82 a share, up $0.72 or 1.63% on a volume of 44,275,429 shares. In after-hours trading, the stock surged 18.7% to $53.20 a share. Meanwhile, NOK rose 1.16% to $27.01 in after-hours trading after closing down 0.26% at $26.70 in the regular trading session on NYSE.
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