Apple to pay Nokia in patent settlement

By on Jun 14, 2011 at 8:40 AM
Business June 14, 2011

On Tuesday Nokia announced that it has reached an agreement with Apple that “will result in settlement of all patent litigation between the companies,” and that both firms will withdraw all complaints against one another from the U.S. International Trade Commission. The two firms have been fighting over patents for the past few years, filing counter suit after counter suit. The battle was thought to have had some closure when the U.S. ITC ruled that Apple did not infringe on Nokia’s patents, but then last month the government group said it would continue its investigation. Nokia said Tuesday that the agreement “consists of a one-time payment payable by Apple,” and that the Cupertino-based company will continue to pay royalties to Nokia for the remainder of the agreement. “We are very pleased to have Apple join the growing number of Nokia licensees,” said Stephen Elop, Nokia’s president and CEO. “This settlement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.” Nokia’s full press release can be found after the break.

Nokia enters into patent license agreement with Apple

Published June 14, 2011

Apple payments to Nokia settle all litigation and have positive financial impact

Nokia Corporation
Stock exchange release
June 14, 2011 at 08:05 (CET +1)

Espoo, Finland – Nokia announced that it has signed a patent license agreement with Apple. The agreement will result in settlement of all patent litigation between the companies, including the withdrawal by Nokia and Apple of their respective complaints to the US International Trade Commission.

The financial structure of the agreement consists of a one-time payment payable by Apple and on-going royalties to be paid by Apple to Nokia for the term of the agreement.  The specific terms of the contract are confidential.

“We are very pleased to have Apple join the growing number of Nokia licensees,” said Stephen Elop, president and chief executive officer of Nokia. “This settlement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.”

During the last two decades, Nokia has invested approximately EUR 43 billion in research and development and built one of the wireless industry’s strongest and broadest IPR portfolios, with over 10,000 patent families.  Nokia is a world leader in the development of handheld device and mobile communications technologies, which is also demonstrated by Nokia’s strong patent position.

This agreement is expected to have a positive financial impact on Nokia’s recently revised outlook for the second quarter 2011 of around break-even non-IFRS operating margin for Devices & Services.

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  • Anonymous

    This was inevitable.  Every other manufacturer has licensed these patents, it was just a matter of time before Apple did the same.

    • Anonymous

      And likely finally for the same license fee that everyone else and their mother are paying. If you’ve followed this lawsuit, you know that Apple tried to license the tech, and that Nokia wanted excessive fees and other perks, above and beyond what FRAND allows. 

      • Anonymous

        could you cite some reference to this, as it is news to me. i had understood that nokia tried to get frand numbers from apple, but apple wanted to pay less (or none) and that started the war. i wouldn’t start a flame war over the different perceptions, but i’d love to know the truth. do you know of any legit sources for the frand+ request from nokia?  i’ll search for the frand- requests i had understood had come from apple.

  • Don

    Always good to see the criminals get caught.

    • Antonio Zipper

      No, Nokia hasn’t been caught out.

      They wanted a higher licensing fee from Apple. Apple didn’t feel it should pay more than, say, Motorola for the same patents. Now this legal mess is all over.

      I don’t know the details of the settlement, but I’m sure Nokia is receiving normal fees, not the unfair amounts they were demanding. The EU doesn’t look kindly on corporate collusion.

    • Anonymous

      Good, then you’ll be just as jubilant when Apple successfully sues the snot out of Android manufacturers.

  • Anonymous

    All you people who think Apple “lost” or Nokia “won” are wrong. None of you have posted yet, but you will. And when you do, know that you’re wrong.

    Settling means that Apple did a cost-benefit analysis and decided it was easier to settle. Nothing more, nothing less. It happens all the time.

    • Playa93 Playa93

      Good thing Nokia won this thing!

      • http://pulse.yahoo.com/_ZX7I3VN423YBFEWTEQOQ5JR5ME Retro

        Damn you made me laugh.

    • http://mindmirror007.blogspot.com/p/home.html Sathya

      Why didn’t they (Apple) do that analysis before suing and counter suing, only to end up paying Nokia for their invention which Apple decided to ride scotch free for so long? Gee, one should wonder!

      • Anonymous

        Because the original dispute was Nokia wanting to use Apple IP in their products so they were asking for a deal outside their FRAND (Fair, reasonable, and non-discriminatory) scope. Apple refused to pay the tax, so Nokia sued. Apple sued back.

        But now that Nokia are building Windows phones, the IP deal between MS and Apple kicks in, so this was no longer a sticking point.

      • Anonymous

        I also remember reading some thoughts that the the MS deal might end the lawsuit, as it is in Apple’s interest to support MS as a third-option, as it eats into Android’s and Blackberry’s market share. My theory is Apple is perfectly content with a 20-30% share of the market and ridiculous profits, but that they don’t want to be facing a single behemoth with 70-80% of the market. Having more viable options dilutes the strength of each competitor, and Apple can rely on it’s ability to carve out a profitable segment of the market.

      • http://mindmirror007.blogspot.com/p/home.html Sathya

        Did you know the patents Nokia was trying to protect were related to GSM, UMTS and WLAN technologies? And what that has to do with Nokia using WP7?

      • Anonymous

        RE:Sathya
        “Did you know the patents Nokia was trying to protect were related to GSM, UMTS and WLAN technologies?”
        Yes. Apple bought chips to put in their phones which adhered to a standard of communication. The patents that Nokia have were included in those standards on the terms that Nokia would license them on FRAND terms. In the case of the deal with Apple, Nokia was insisting that Apple cross license Apple’s IP pertaining to the iPhone so that Nokia could use them without penalty.

        “And what that has to do with Nokia using WP7?”
        Basically Nokia have stopped requiring the need to license those IPs from Apple as they are kind of baked into Windows Phone 7 and Apple and Microsoft have cross licensing deals already in place.

        Do you understand what I am saying now?

      • Helmholtz

        “Scotch free”?

        Lol

      • http://mindmirror007.blogspot.com/p/home.html Sathya

        Not so fast, brother! ;) Origin of Scott Free is Scotch free! Google it… :D

    • Bullyboyb

      They could have counter sued for costs.
      Cost-benefit? I don’t think so if you consider that they have to pay a one time payment and royalties there after.
      Its more like if we loose we will pay more compensation and royalties for longer. That’s the only cost-benefit analysis that was done. This was a contigency ape couldn’t afford if it went tits up.

    • http://twitter.com/ChazClout ChazClout

      Were you involved in the case then?

      • Anonymous

        I didn’t have to be. They analyzed the situation and realized it wouldn’t be worth litigating. That’s why they’re not litigating anymore.

        Or, if you hate Apple: they realized they were going to lose, so quickly settled, rather than let Nokia wreck them. Better? Sorry to make it seem like Apple is not the physical manifestation of Mephistopheles on this mortal plane.

      • http://twitter.com/ChazClout ChazClout

        Hate apple? What are you on about?
        The money I spend on Apple hardware and software would suggest otherwise.

        I couldn’t care less for faceless entities like Apple our Nokia. You seem to be attempting to justify the outcome of this litigation, I simply doubt your analysis.

        Only the people involved at Nokia and Apple know for sure what went on, which it seems you weren’t involved in.

      • Anonymous

        @ChazClout:disqus If you’re not an irrational hater/fan, my bad. I’ve been posting around here long enough to know that the smart move is to just assume that everyone is a frothing nutjob when it comes to Apple or Android. Glad to see at least one other person who isn’t.

        I don’t know if I’d call it… justifying the decision. I just think that’s what they did. It’s not like Apple sued first and changed their minds. The situation changed, they analyzed it, and decided that the court battle was no longer worth it.

      • http://twitter.com/ChazClout ChazClout

        @Sqube:disqus 
        I understand your pessimism, Disqus has bought trolling to a new level, I rarely read/contribute to comments now and assume it’s full of fanboy squaller too.
        On this case, there seems to be so much opinion in comments/forums on who won or lost with very little fact out there in the real world (Apple won because of X, Nokia won because of Y).

        I’m simply glad it’s over!

    • Anonymous

      Fact is, Nokia is in the business of wireless phone and back end for the last 20 years. I am sure they have more than enough patents prove to make Apple lose.

      Just look at RIM v. NTP.

  • Aha

    good about time apple gets some of there own poison 

  • Biff Tannon

    Nokia: They see me rollin’, they hatin, partollin’, they tryna catch me ridin’ diirty.

    Apple: Steve Jobs INVENTED GOD.

  • Anonymous

    ‘We are very pleased to have Apple join the growing number of …. licensees’

    That’s all they are and all they ever will be: one big iCrappin’, iCopying, unoriGinal, gotta’ steal from others, LICENSEE. Aside from their “Hommo” button, there has been nothing original to come out of cUpErTiNo.

    Apple owes everyone royalties!

  • Anonymous

    I’m sure there will be lots of stupidity here of the “Yay, Nokia won….take that you Apple scoundrels!” variety.  If you look at the history of these lawsuits, it had little to do with Apple not wanting to pay Nokia.  It was about Apple not wanting to pay Nokia more than anyone else was paying them….which Nokia apparently wanted Apple to do.  Hence all the lawsuits and countersuits.

    More than likely this was a win for both sides.  Apple probably got Nokia to back down from their excessive fees, and Nokia in return got Apple to license their tech and pay any back royalties they might have owed while the lawsuit was going on.  I don’t doubt Apple already had these fees sitting aside in escrow.

    It was never a matter of Apple not paying, it was always a matter of how much.  As there was a settlement reached and not a court verdict, I personally think that points to everyone getting a little bit of what they wanted here. 

    That being said, please cue the fandroids to start yelling “Nuh uh…..Apple lost.  They’ll be out of business in a year, believe me!”.

    • Anonymous

      Finally, someone who gets it.

    • http://daveysmind.tumblr.com David M.D.

      Yet no amount is ever known. Apple doesn’t know what other companies are paying. So it seems more like a “We feel we shouldn’t have to pay this amount” argument more than anything.

      There’s always 3 sides to a story. IN this case, there’s Nokia’s, Apple’s, then the truth. We’ll only know 2 of those sides. 

      • Anonymous

        Licensing agreements are not guarded even remotely as closely as trade secrets. I’ve been in enough corporate dealings to know that it’s typically not too hard to find out what someone else is paying a vendor.

  • Anonymous

    I think we all saw this coming. You cant get in the game 5 years ago and try to claim you did not steal ideas from entrenched heavyweights. Congrats Nokia! Spend the dough wisely.

    • Anonymous

      and the market reacts:

      Apple up 1% = net value to stock holders: 3Billion

      Nokia ADRs are up 2.5% = 500Million  (which is less than the rumored cash up front value of the deal)
                            
      So, who actually ‘won’ today?

      At best, Nokia is losing less slowly.

      Battles and wars…. Sometimes it’s better to give up ground to force a better position.
      Apple at worst knows the new cost of the iDevices it sells…
      at best, Apple can move it’s legions of lawyers to deal with real problems…. wireless carriers and LTE deployments.

      Nokia at best now makes a couple dollars on each phone enabled device apple sells. 
      Nokia at worst now is becoming a non-innovator and just a patent troll trying to survive off of a small % of each phone sold (including the one’s it makes itself, given that MS controls the code base.. moving it into the competitive realm with LG and HTC (like MS drove HP against Lenovo and Acer in Windows wars).

  • Bobdonhim

    BGR….Where is the news about Apple recalling VZW iPad2′s over connectivity issues????  You were all over the small PlayBook recall real quick!!!!  Get off your knees and report real news!

  • charles

    As soon as  nokia went with Microsoft, MS is going be evil again in mobile space. I am going to support android, in any case. 

  • Steve Hillshire

    Pay up Jobs!  Copy boy!!!

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