Nokia seeks to halt US imports of Qualcomm chips

HELSINKI, Aug 17 (Reuters) Nokia, the world's top cell phone maker, asked authorities to halt imports of some Qualcomm Inc. chips into the United States and the phones that use them, saying they infringe five Nokia patents.

Nokia and Qualcomm have been in a legal dispute after part of a licensing deal over technology patents expired on April 9.

Their increasingly bitter fight is worrying investors and the industry on both sides of the Atlantic.

Finland's Nokia, which makes more than one-third of the world's phones, asked the U.S. International Trade Commission for the ban because of Qualcomm's use of Nokia patents in certain chips for phones based on popular wireless standards.

Nokia said the patents relate to technologies that improve the performance of mobile devices and enable lower manufacturing costs, smaller products and better battery life.

''We believe Qualcomm is using those patents on an unauthorized basis,'' Nokia Chief Financial Officer Rick Simonson told Reuters. ''This action is clearly a response to Qualcomm's ITC case filed in June 2006.'' In June 2006, Qualcomm filed a complaint against Nokia with ITC regarding six patents, asking for an injunction against certain Nokia phones. Qualcomm then voluntarily withdrew three of the patents in the case, scheduled for a hearing in September.

''We think the remaining three are also without merit,'' Simonson said. ''We said then that the chance of injunction was very remote. This is still true.'' Qualcomm representatives declined comment on Nokia's latest move, saying the company had not seen the complaint.

The ITC confirmed it received the complaint, which faces a standard 30-day review for ''legal sufficiency'' before being put before the commission.

MAJOR INDUSTRY BATTLE The bigger dispute between the two companies stems from Nokia's use of Qualcomm patents for high-speed 3G wireless technology, and also relates to Qualcomm's chip business, which Nokia says uses many Nokia-patented technologies.

Qualcomm has also been fighting several legal battles with rival Broadcom Corp.. The ITC ruled against Qualcomm in one dispute, banning U.S. imports of new advanced phones using chips found to infringe on Broadcom patents.

Nokia's U.S. shares were up 3 percent, or 83 cents, at .23 on the New York Stock Exchange, while Qualcomm shares were up 22 cents to .31 on Nasdaq in broadly higher markets following a U.S. rate cut.

Stifel Nicolaus analyst Cody Acree said that every new legal issue adds to investor concerns about Qualcomm.

''Investors don't need another reason to be afraid right now,'' he said.

Simonson declined to estimate how many products shipped to the United States use the Nokia patents in question and said only, ''It is pretty wide.'' Many investors expect the legal battles between Qualcomm and Nokia to ultimately lead to a new licensing agreement, with the legal winner potentially gaining the best terms.

Simonson said Nokia preferred to reach an agreement with Qualcomm sooner rather than later but was not in a hurry.

Qualcomm has asked arbitrators to look at the dispute . ''Fundamentally, this is a dispute over the terms of the existing license agreement and continuing obligations under that agreement,'' said Qualcomm spokeswoman Emily Kilpatrick.

Analysts estimate Nokia had paid Qualcomm about 0 million per year and wants to reduce this cost. Nokia says its patent portfolio is much stronger now than 15 years ago, when the original licensing deal was signed.

Please open the following link to read a chronology of Nokia and Qualcomm's legal battles nL17223451 REUTERS SR DB2222