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Nokia Calls for 5% Cap on 3G Patent Royalties

Finnish cell phone giant Nokia Corp. on Wednesday urged competitors to place a hard cap on royalty rates for 3G patents, arguing that such a move would promote the spread of the WCDMA technology.

Nokia, which claims it owns more WCDMA patents than any other wireless equipment manufacturer, said that capping the licensing fees for WCDMA technology of 5 percent would "encourage growth and innovation in the industry."

Under the Nokia proposal, which would be applicable to both network gear and phones, patent holders would agree to limit the cumulative royalty rate to a maximum of 5 percent, regardless of how many patents the equipment includes.

Royalty rates for the much-vaunted Wideband Code Division Multiple Access (WCDMA) technology are generally computed as a percentage of the price of the equipment using patents.

The Nokia plan is sure to rankle some manufacturers, especially a company like Qualcomm which controls most of the critical patents for the network standard CDMA technology.

Besides Nokia and Qualcomm, other holders of registered WCDMA patents include Ericsson , Motorola and NTT DoCoMo .

But, Nokia insists the proposal will ignite the widespread growth of the next-generation technology, which promises increased bandwidth of up to 2 Mbps in fixed wireless applications.

"Under this proposal no manufacturer should pay more than 5% royalties covering all essential WCDMA patents from all patent holders. With thousands of WCDMA base stations already deployed by network suppliers -- and more being installed every day -- Nokia sees the 3G market moving ahead with full speed and feels that setting a target for cumulative royalty rates for WCDMA patents at 5% will further promote the growth of the mobile industry," the company said.

Senior Vice President of Nokia Networks, Dr. JT Bergqvist, said a 5 percent cap "encourages greater growth and innovation in the industry."

With licensing arrangements already in place with several major companies, Nokia said it would actively pursue negotiations aimed at reaching reasonable and sustainable license arrangements.

Nokia claims it is the number one IPR holder in the WCDMA standard and technology, with more than 25 percent of the essential patents registered so far with the European Telecommunications Standards Institute (ETSI), Association of Radio Industries and Businesses (ARIB), and Telecommunications Technology Committee (TTC) standardization bodies.

Separately, Nokia has teamed up with other participants in the 'OSS through Java Initiative' to release the OSS Service Activation API to support the development of business technology for communications companies worldwide.

The release of the OSS Service Activation API (Application Programming Interfaces) would provide interfaces for integrated management software supporting a variety of Service Activation functions, including activating, querying, modifying and canceling services.

"The API will allow Java developers to build advanced integration-ready service activation solutions. This will eliminate the need for customized integrations - a costly process that adds no functionality to the applications - and speed the deployment of innovative OSS (Operations Support System) and BSS (Business Support Systems) solutions," according to a statement.

Other companies participating in the 'OSS through Java Initiative' include BEA, Cygent, Digital Fairway, Ericsson, MetaSolv, Motorola, NEC, Nortel, Sun Microsystems and Telcordia

The Initiative's APIs use Java 2 Platform Enterprise Edition (J2EETM) and XML. The specification, reference implementation code, and technology compatibility kit for the Service Activation API can be downloaded here.