Chip giants Nokia and Qualcomm are falling out big time over payments for patented technologies in 3G handsets.

On Thursday, Nokia said that it has paid Qualcomm $20m for patent licenses covering the second quarter 2007, stemming from licensing agreements from 1992 that partially expired on April 9.

However, Qualcomm feels that it has been short changed and said that Nokia’s rights to sell devices using Qualcomm chipsets has expired.

Qualcomm has since filed a case with the American Arbitration Association, requesting a ruling that Nokia’s continued use of Qualcomm’s patents in Nokia’s CDMA handsets, including WCDMA, constitutes an agreement to extend the license under existing terms. And as such, Qualcomm should be paid more.

However, Nokia argues that its payment is not related to the old agreement and is “based on the licenses that Qualcomm has agreed and provided through the European Telecommunication Standardisation Institute (ETSI)”.

The case continues.