Qualcomm's Legal Battles Hold Big Implications for Cellphones

Qualcomm Inc. scored a victory in a New Jersey court last week. But the chip maker still faces legal battles that have big implications for the cellphone market.

The cases -- linked to high-stakes negotiations involving companies that include Nokia Corp. -- could help define fair conduct in licensing patents that are essential in making high-technology products. They may also shape patent royalties that generate about two-thirds of Qualcomm's profits.

Qualcomm, whose stock has been under pressure lately because of legal concerns, is counterattacking with patent-infringement suits. Its executives also contend their company is a victim of a conspiracy by Nokia and five other big technology companies to work against Qualcomm on three fronts: in courts, before antitrust authorities agencies and in standard-setting groups. These companies' goal, Qualcomm executives argue, is to push down royalty rates and hobble a business that helps other companies compete with them.

"You have some of the leading manufacturers in the world creating this coordinated action to attack a technology company," Steve Altman, Qualcomm's president, said in an interview. "I've never seen anything like it."

The competitors say it is routine and lawful for companies in similar legal proceedings to cooperate, and they argue that Qualcomm is abusing its patent power. "Qualcomm's unwarranted, unspecified and misleading allegations appear to be unfortunate attempts to distract attention from the true matters at hand," said William Plummer, Nokia's vice president for external affairs.