Nokia patent deal with RIM to lift finances

Deal includes a one-time payment to be booked in the fourth quarter
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First Published: Fri, Dec 21 2012. 07 58 PM IST
Nokia is one of the industry’s top patent holders having invested €45 billion in mobile research and development over the past two decades.
Nokia is one of the industry’s top patent holders having invested €45 billion in mobile research and development over the past two decades.
Helsinki: Struggling Finnish mobile phone maker Nokia Oyj has settled its patent dispute with BlackBerry maker Research in Motion Ltd. (RIM) in return for payments, as it tries to exploit its trove of technology patents to boost its dire finances.
Terms of the agreement were confidential, but Nokia said on Friday it included a one-time payment to be booked in the fourth quarter, as well as ongoing fees, all to be paid by RIM.
Nokia is one of the industry’s top patent holders, along with Qualcomm Inc and Ericsson AB, having invested €45 billion ($60 billion) in mobile research and development over the past two decades.
It has been trying to make use of that legacy to ensure its survival as it battles to recover ground lost in the lucrative smartphone market to the likes of Apple Inc. and Samsung Electronics Co.
With sales and cash reserves falling and its credit rating cut to junk over the past year, Nokia in October announced a €750 million convertible bond to help fund its fight.
The agreement with RIM settles all existing patent litigation between the two companies, Nokia said, adding that similar disputes with HTC Corp. and ViewSonic Corp. still stood.
“This agreement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market,” said Paul Melin, Nokia’s chief intellectual property officer.
Nokia has earned around €500 million a year from patent royalties in key areas of mobile telephony.
Some analysts have said it could earn hundreds of millions more if it can negotiate with more companies successfully.
They estimated its June 2011 settlement with Apple was worth hundreds of millions of euros, but said the RIM agreement was likely worth much less because of lower BlackBerry sales.
“Not hundreds of millions,” said Martin Nilsson, analyst at Handelsbanken, when asked for an estimate on the settlement. He added the news was positive, if not surprising.
“More or less, when companies like Ericsson, Qualcomm or Nokia go into negotiations, they end up net winners.”
Nokia shares have been retreating in the past few sessions from their strong surge of the past month.
They rose around 40% over the month through Tuesday on speculation its new Lumia smartphones were selling well. Analysts have warned the phones appeared sold out in many stores as supplies were short to begin with.
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First Published: Fri, Dec 21 2012. 07 58 PM IST
More Topics: Nokia | RIM | Blackberry | patents | Lumia |
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