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Tuesday, May 17, 2005 11:31:38 AM
"I think we have to remember that Nokia requested arbitration and I am sure they did with their potential down side in mind. What can they gain by settling?"
Nokia's legal activities after initiating the 2G arb focused mostly on patent validity. First they kicked open the doors to get access to the PSJ rulings in a settled and vacated suit between Ericsson and InterDigital. Then they challenged the validity and infringement of some 2G patents in a UK lawsuit.
Their argument to the arb panel appeared to be focused on getting a lower rate than Ericsson and SNE agreed to pay in their settlement. Especially in regards to the handset rate being paid by SNE. They appeared to be going after evidence of some kind of bias in setting those rates when they filed additional legal actions against both Ericsson and InterDigital seeking to gain discovery of the details in that settlement agreement.
Guess what? Apparently the arb panel did not want to hear what Nokia had to say about "patent validity", because Nokia withdrew their motions on that issue last summer. In addition, the courts in both Texas and North Carolina have denied Nokia's motions for expanded access to the Ericsson/SNE settlement details, and Nokia's challenge of 2G patents in the UK courts has been moved out from July to October. Their 3G challenge in Delaware is going into the final stages on a motion to dismiss for lack of jurisdiction.
Sure looks like whatever it was that Nokia was thinking when they initiated the 2G arb, things have not played out the way they expected. We have seen two federal court judges familiar with the situation tell the Nokia counsel standing before them that, in their opinion, Nokia's contract requires them to pay InterDigital what Ericsson and SNE agreed to pay. Not sure what weight anybody else gives to those opinions, but this interested observer was impressed!
Nokia can wait a few more weeks and see what the arb panel rules, or they can negotiate their best deal with InterDigital before that ruling comes down. The really good news is that we finally have some leverage on Nokia to do something other than shoot at us in the courts.
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