Nokia Oyj and Apple, the world’s two biggest mobile-phone makers, agreed to settle all patent litigation between the companies in a deal that awards a one-off payment and royalties to the Finnish handset maker.
Nokia rose as much as 4.1 per cent in Helsinki trading. The agreement will bolster the Devices & Services unit’s second-quarter profitability, Espoo, Finland-based Nokia said in a statement today. The details of the contract, under which Apple will pay Nokia an undisclosed sum and royalties for the term of the agreement, are confidential, Nokia said.
The two mobile-phone makers have been in litigation since October 2009, when Nokia filed a lawsuit accusing Cupertino, California-based Apple of infringing patents. The Finnish company also demanded royalties on the millions of iPhones sold since the device’s introduction in 2007. Nokia said in March it has 46 patents asserted against Apple in civil lawsuits and complaints lodged with the US International Trade Commission.
“This frees up resources for both Apple and Nokia,” said Florian Mueller, a Munich-based consultant and intellectual property activist. “Other companies whom Nokia will ask to pay royalties will have to think very hard whether to pay or pick a fight.”
Nokia rose as much as 17.6 cents to 4.47 euros and traded 0.9 per cent higher at 4.33 euros as of 10:26 a.m. The stock has lost more than three quarters of its value since Apple introduced the iPhone in June 2007.
Licence Fees
Nokia Chief Executive Officer Stephen Elop is readying a line of phones based on Microsoft Corp’s Windows Phone 7 operating system to replace the company’s own Symbian line, which is losing market share to Apple’s iPhone and Android handsets based on Google Inc’s Android system.
“We’re glad to put this behind us and get back to focusing on our respective businesses,” said Apple spokesman Steve Dowling.
Nokia wouldn’t disclose the amount of the payments. Royalty agreements are generally secret, said Martin Nilsson, a Stockholm-based analyst with Handelsbanken.
“Everybody pays licence fees, that’s how this industry has worked for 25 years, and now the setup with Apple isn’t any different to what they have with the others,” Nilsson said. “It’s in line with expectations that they resolved it and that Nokia became a net recipient.”
Smartphone Growth
Nokia’s first claims covered technology for wireless data, speech coding, security and encryption. Subsequent claims asserted rights to wiping gestures on a touchscreen and on- device application stores, both of which Nokia said it filed to patent more than 10 years before the iPhone launch.
The Finnish company also broadened its claims to cover Apple’s iPad and iPod Touch.
