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Qualcomm Rejects Nokia Patent Cap Proposal

Qualcomm Inc. has scoffed at calls for an industry-wide 5 percent limit on royalty rates for 3G patents, dismissing the proposal by competitor Nokia as "self-serving."

Qualcomm spokesperson Christine Trimble told InternetNews the Nokia proposal was narrow and would not benefit the companies who invest in developing new technologies.

"We will not join that group that Nokia is belatedly trying to sponsor. Their proposal appears to be very self-serving to benefit the equip manufacturers and not the companies who develop the technologies and hold the intellectual property," Trimble said.

The San Diego, Calif.-based Qualcomm, which pioneered the code-division multiple access (CDMA) technology used in cell phones and telecom equipment, controls most of the critical patents for the network standard CDMA technology.

"We have licensed more than 50 companies for (use of) WCDMA technology. That list includes Nokia. That demonstrates that the industry thinks our rates are fair and reasonable and not an impediment to the deployment of 3G services," she added.

Trimble declined to discuss specifics of Qualcomm's licensing fees or how royalty rates are structured. Licensing of its CDMA technology and system software account for around 30 percent of Qualcomm's sales so it's no surprise that the company would turn its back on any attempt to put a cap on the lucrative licensing fees.

Trimble said the company has registered more than 1,900 patents (issued and pending) for CDMA technology and challenged claims by the Finland-based Nokia that it owns more WCDMA patents than any of its competitors.

On Wednesday, Nokia called for a hard cap on royalty rates for 3G patents, arguing that such a move would promote the spread of the WCDMA technology.

Nokia argued that capping the licensing fees for WCDMA technology at 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.

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.

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.

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

Officials at Ericsson, Motorola and NTT DoCoMo could not be reached to respond to the Nokia call.