Next week starts the Nokia-Qualcomm shoot-out in the Delaware Chancery Court. It will decide first, whether Nokia impliedly extended its licensing agreement with Qualcomm by continuing to use Qualcomm's technology and second, whether Qualcomm is charging unfairly high royalties on its patents.

Nokia signed an agreement on CDMA royalties with Qualcomm in 2001. It expired in 2007. Qualcomm acknowledges those patents have been paid off.

The companies discussed terms for licensing newer, WCDMA patents, but failed to agree terms. Nokia said they were not worth as much as the older patents.

Nokia has been putting $20m a quarter into an account to pay for licenses for WCDMA. Qualcomm is claiming that, by using WCDMA technology, Nokia has, by implication, extended the original 2001 agreement, and should pay royalties at the old rate.

Nokia also says that the reason WCDMA was adopted by the wireless industry was because Qualcomm agreed to license its patents for WCDMA on fair, reasonable and non-discriminatory terms and its royalty rate does not comply with that.

Although not disclosed, it is believed that the rate charged by Qualcomm is between 3 per cent and 5 per cent of the price of the phone. As critics have pointed out this applies whether the phone is made from plastic or platinum and therefore cannot truly reflect the value of the technology inside.

It is being said that the Delaware case could drag on for a couple of years. Predictions that Nokia and Qualcomm would settle their dispute on the steps of the Delaware Courthouse have not, so far, materialised.