Nokia and Qualcomm have settled a long running dispute that has seen the two firms trade frequent legal actions over intellectual property over the past few years.

The two firms announced a new agreement on Wednesday that settles all outstanding litigation between the two companies, and sees Nokia withdraw a complaint it had made to the European Commission that Qualcomm’s IPR licensing was not fair and non-discriminatory. In return Nokia gains a licence to use all of Qualcomm’s patents for Nokia handsets and Nokia Siemens Networks network equipment.

The new agreement has a 15 year term and involves a one-off payment from Nokia to Qualcomm as well as ongoing royalty fees from the Finnish firm to the American. Details of these amounts have not been disclosed, but the lump sum presumably covers royalties for the period since April 2007 when Nokia refused to keep paying royalties to Qualcomm.

The deal covers a range of technologies, including GSM, EDGE, CDMA, WCDMA, HSDPA, OFDM, WiMAX and LTE. Nokia has agreed not to use any of its patents directly against Qualcomm, which enables Qualcomm to integrate Nokia’s technology into Qualcomm’s chipsets. Nokia has also agreed to assign ownership of a number of patents to Qualcomm, including some essential patents related to WCDMA, GSM and OFDMA.

“We believe that this agreement is positive for the industry, enabling the market to benefit from innovation and new technologies,” said Olli-Pekka Kallasvuo, CEO of Nokia Corporation. “The positive financial impact of this agreement is within Nokia’s original expectations and fully reflects our leading intellectual property and market positions.”

“I’m very pleased that we have come to this important agreement,” said Dr. Paul E. Jacobs, CEO of Qualcomm. “The terms of the new license agreement, including the financial and other value provided to Qualcomm, reflect our strong intellectual property position across many current and future generation technologies. This agreement paves the way for enhanced opportunities between the companies in a number of areas.”

Analysts at investment bank Nomura interpreted the deal as a win for Qualcomm, and estimates the royalty rate to be somewhere between 1.0 and  4.4 per cent. The firm sees the situation as negative for Nokia as it believes that “Nokia’s long-term forecasts implicitly include never really paying Qualcomm again.” Qualcomm could face difficulties if it becomes clear that, as part of the deal, Nokia has received a preferential discount on royalty rates as this would lead to demands from other players for comparable discounts.