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Nokia and HTC make peace in deal that could push Finnish company into $1 billion royalties club

HTC has finally done what it maybe should have done a while ago and signed a deal with Nokia to end patent litigation involving 50 plus patents, taking place in countries across the world. The various cases have not gone well for HTC, which has been on the losing end of important decisions in jurisdictions such as the UK, Germany and the US. According to FOSS Patents, yesterday’s agreement was announced just before the International Trade Commission was due to issue a ruling that may well have led to a US import ban on devices manufactured by the Taiwanese company.

Under the terms of the deal, the two companies will enter “into a patent and technology collaboration agreement”, that “will involve HTC's LTE patent portfolio”. Crucially, “HTC will make payments to Nokia”. The sums involved have not been revealed, but are likely to be substantial.

In 2012, BlackBerry (RIM back then) paid a one-off $65 million to settle a dispute with Nokia, and agreed to on-going payments estimated at between $2 and $5 per device. Prior to that, a settlement with Apple also netted the Finnish company an up-front sum and on-going revenues. More recently, in November 2013, it was announced that Samsung had extended a licensing deal with Nokia for another five years. “Samsung will pay additional compensation to Nokia for the period commencing from January 1, 2014 onwards, and the amount of such compensation shall be finally settled in a binding arbitration which is expected to be concluded during 2015,” the Nokia press release about the deal stated.

In a presentation relating to its purchase of Nokia’s handsets business last year, Microsoft stated: “Nokia’s portfolio has approximately 30,000 utility patents and patent applications; we consider it to be one of the two most valuable portfolios relevant to wireless connectivity.” The other one belongs to Qualcomm. As part of its purchase, Microsoft took a 10-year licence to that portfolio, worth €1.65 billion ($2.25 billion).

To the best of my knowledge, the last time Nokia officially commented on its licensing revenues was in April 2013, when the company’s CEO forecast that it would make €500 million ($650 million) from them during the year. However, that was before the agreements with Microsoft, Samsung and HTC were announced. Now that these deals have been done, though, it is probably not a stretch to predict that next time the company goes public with its annual royalty figures they will stand at around $1 billion. And there is the potential for plenty more still to come; CIPO Paul Melin and his team still have much to do as they work their way through the Android eco-system.  

Joff Wild
IAM Magazine
08 February 2014

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