Qualcomm expects its legal costs to double this year to $200 million amid a slew of lawsuits from firms accusing it of charging unjust fees for the use of its patented technologies. The company owns 1,900 patents in the U.S. for code division multiple access (CDMA), a wireless standard that is crucial for cell phones and cellular networks. Last year, licensing fees generated a third of Qualcomm’s $7.53 billion revenue and three-fourths of its pretax profits worth $3.16 billion.
Qualcomm is now insisting it should get the same royalties for wideband CDMA or WCDMA, a protocol used to enable faster Internet downloads by GSM-based carriers like Cingular Wireless and T-Mobile. But equipment makers stressed that such position would disregard inputs from Nokia, LM Ericsson and Motorola. Although it proved victorious in an antitrust complaint by Broadcom, Qualcomm continues to face challenges from Nokia and others. The Finland-based handset maker cited a 2005 study stating that Qualcomm only has rights over 38 percent of the standard’s 732 “essential” patents. In response, the company released “white papers” that disproved Nokia’s report, touted its contributions to WCDMA, and defended its business model.