Nokia, the world's biggest maker of mobile phones, and chipmaker Qualcomm announced on Wednesday that they had signed a licensing agreement settles all patent litigation between the two companies.
Financial terms of the agreement were not released, but the companies said Nokia will pay royalties to Qualcomm for 15 years to license technology that improves performance and battery life, while reducing the size of products. Nokia said it will also withdraw its antitrust complaint against Qualcomm filed with the European Commission.
"We believe that this agreement is positive for the industry, enabling the market to benefit from innovation and new technologies," Nokia Chief Executive Olli-Pekka Kallasvuo said in a statement.
Shares of San Diego-based Qualcomm rose 18 percent, or $8.38, to $53.20 in after-hours trading.
The companies have been locked in a bitter court battle since April 2007, when negotiations over the renewal of key patents broke down. The pair had sued and countersued each other in various countries across the world but had been unable to find a resolution to the spat over the patents.
The agreement was announced after a Delaware Chancery Court judge delayed the opening of a trial on patent commitments and fees.
Qualcomm delayed the release of its fiscal third-quarter results for several hours to first announce the agreement with the Finnish phone maker. It reported that profits fell 6 percent to $748 million, or 45 cents a share, during the three-month period ended June 29, down from $798 million, or 47 cents a share, the same period last year. Revenue grew 19 percent, to $2.76 billion from $2.33 billion.