June 14 (Bloomberg) -- Nokia Oyj and Apple Inc., 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.
The agreement will bolster the Devices & Services unit’s second-quarter operating profitability, Espoo, Finland-based Nokia said in a statement today. The details of the contract, under which Apple will pay Nokia an undisclosed sum as well as royalties for the term of the agreement, are confidential, the Finnish company 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 U.S. 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 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.
License Fees
“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 license 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.”
Nokia’s claims cover features including touch user interfaces, signal noise suppression and on-device application stores as well as more basic mobile technologies. Mobile-phone makers generally cross-license each other’s patent portfolios with extra payments covering the differences in value.
“We’ve been talking to them since 2007, discussions have continued throughout the litigation and our goal has always been to stop Apple using our patents without paying for them,” Nokia spokesman Mark Durrant said by phone. All actions including Apple’s suits against Nokia and conflicts in the International Trade Commission have been dropped, he said.
--With assistance by Adam Satariano in San Francisco. Editors: Simon Thiel, Robert Valpuesta.Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net
To contact the editors responsible for this story: Kenneth Wong in Berlin at kwong11@bloomberg.netvroot@bloomberg.net.
