Print 8 comment(s) - last by TakinYourPoint.. on Jun 14 at 6:43 PM

Nokia CEO Stephen Elop
Enter patent license agreement in which Apple pays Nokia

It was just yesterday when we reported that a Japanese market research firm predicts Apple will surpass Nokia in global market share by the end of this year. Against that backdrop, along with the rest of the mounting bad news coming from the Nokia camp, it's especially interesting to learn that Nokia and Apple have settled their ongoing patent dispute and have entered a patent license agreement.

The news was announced this morning via an official press release from Nokia. "We are very pleased to have Apple join the growing number of Nokia licensees," said Nokia CEO Stephen Elop. "This settlement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market."

The settlement comes after years of grappling in court. Nokia first filed a lawsuit against Apple alleging patent infringement in October of 2009. The judge sided with Apple in that case, but Nokia filed another suit earlier this year alleging that Apple also infringed on seven patents related to multi-tasking operating systems, data synchronization, positioning, call quality, and the use of Bluetooth accessories it holds. In response, Apple filed its own countersuit.

But in the settlement announced today, Nokia appears to be the clear winner. Apple will make a one-time payment to Nokia and continue to pay on-going royalties for the term of the agreement. The specific terms of the contract are confidential and were not disclosed. 

The settlement puts to rest all complaints that either company has against the other with the U.S. International Trade Commission.

It is also expected to have a positive impact on Nokia's recently revised Q2 2011 profit outlook.

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Who won ? Apple or Nokia
By MrAwax on 6/14/2011 7:58:01 AM , Rating: 5
The issue was the following: Nokia owns patent related to GSM standard and Apple wasn't a license of those patents.

When the GSM standard was drafted, all participants had to disclose the patents they owned that could apply to GSM and to have a "fair" licensing program for those patents.
It seems that so far, most phone manufacturer have extensive cross-licensing agreements so they can mutually use their various radio patents.
Now enter Apple, with zero existing cross-license agreement.

The rumor said that Nokia wanted such a cross-license agreement so it could then use some Apple patents on multitouch phone. Apple waants above all to differenciate itself from its competitor. To it, having exclusive usage of some patents is very important. In this approach, Apple didn't want any cross-license agreement : it wanted a "fair" license of Nokia GSM related patents. And Nokia was offering those at a very high price, hoping Apple to prefer the "cheaper" cross license.

Now, the wording from Nokia statement suggested that Apple obtained what it wanted : a pure cash settlement. Apple is now a Nokia licensee BUT Nokia does not have access to Apple patents.

So who won ?

RE: Who won ? Apple or Nokia
By cditty on 6/14/2011 8:13:55 AM , Rating: 3
Nokia won... It got some cash and continuing royalties. It has it's deal with Microsoft, which has as many or more multitouch patents as Apple.

RE: Who won ? Apple or Nokia
By woofersus on 6/14/2011 8:18:25 AM , Rating: 3
Well, with the agreement Nokia has entered into with Microsoft, their own operating systems (for smartphones anyway) become less of an issue, so their strategy with Apple may well have changed. It could be part of why a settlement has now been reached. Microsoft can worry about patents and licensing on WP7 and Nokia has a new stream of revenue from Apple.

RE: Who won ? Apple or Nokia
By chiadog on 6/14/2011 9:18:44 AM , Rating: 5
So who won ?

The lawyers.

RE: Who won ? Apple or Nokia
By XZerg on 6/14/2011 10:00:10 AM , Rating: 2
The lawyers always win...

RE: Who won ? Apple or Nokia
By smackababy on 6/14/2011 9:40:24 AM , Rating: 5
Nokia didn't lose anything. The money they spent on the patents has already been recouped. It was win-win for Nokia. They get money from Apple and lose nothing.

RE: Who won ? Apple or Nokia
By omnicronx on 6/14/2011 2:37:54 PM , Rating: 2
Just because the best case scenario was not achieved, it hardly means they did not win.

They got a cash settlement and continuing royalty fees for technology whose R&D costs have most likely long been paid off long ago.

Apple is paying up and Nokia is not.. That seems like a win for Nokia in my books..

By TakinYourPoints on 6/14/2011 6:43:27 PM , Rating: 2
It is becoming more clear who is losing: other handset manufacturers.

Quote from an article I just read:

Other companies, notably Android handset manufacturers, may now have to play ball with Nokia on these patents -- and they don't necessarily have the margins to send 1% of gross revenues to Nokia as easily as Apple can. In fact, because Apple has so many of its own patents (some of which it cross-licensed to Nokia) other manufacturers may have to pay even more for the same licenses.

Florian Mueller has suggested just that at FOSS Patents:
"Given that Android is in many ways a rip-off of Apple's operating software, Android-based devices are highly likely to infringe on largely the same Nokia patents that Apple now felt forced to pay for.
This is a sweet defeat for Apple because its competitors -- especially those building Android-based devices -- will also have to pay Nokia, and most if not all of them will likely have to pay more on a per-unit basis because they don't bring as much intellectual property to the table as Apple definitely did."

Apple pays off Nokia, but exposes the competition as well. Competition that doesn't have as much money or intellectual property to barter with.

"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs

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