Here’s why Nokia isn’t selling its patents to Microsoft

When Microsoft acquired Nokia this Tuesday, Nokia remained the owner of its own patents. $2.2 billion of the $7.2 billion deal was spent on licensing Nokia’s patents for the next 10 years, which allows Nokia to license its IP to other companies and continue earning income from them while its mobile operations wind down. Reuters reports that this agreement is strategic for both Nokia and Microsoft, as Microsoft has already received patent royalties from around 20 Android manufacturers “as part of its effort to raise the cost of Google Inc’s mobile operating system.” Because Nokia has retained ownership of the patents, the Finnish corporation can obtain the same royalties if it so chooses to go after vendors. Michael Pierantozzi, an advisor at Lumen SV, is convinced that Nokia would have sold the patents outright if Microsoft had accepted its offer, but these developments likely indicate that the price was too high.