Featured Article from Software Licensing

Nokia and Samsung Quietly Renew Licensing Deal

November 08, 2013

Patent issues have always been something of a bone of contention, between major companies going at each other over various patents—Apple and Samsung (News - Alert) come pretty readily to mind in the field of patent litigation—and the various non-practicing entities (or “patent trolls”, for those who prefer the term) that own a set of patents and not much else, there's quite a bit going on in the field of software and hardware patents. One of the latest go-rounds in the field seems to have been settled quietly, amicably, and not just a bit mysteriously in the form of Nokia (News - Alert) and Samsung's patent settlement.

Nokia recently announced that it was extending a patent license agreement with Samsung for another five years. The two firms were heading into binding arbitration to settle the matter of compensation relating to the agreement, and expected that arbitration would conclude sometime in 2015. Samsung will start making payments January 1, 2014, as the agreement would have expired at the end of this year had it not been for the extension.

The details around said deal—just what patents are covered, just how much money is involved, and similar matters—are being kept very much hush-hush, with several non-disclosure agreements surrounding the details. Nevertheless, given that Nokia, at last report, has deals with 50 different companies—including “most of the major handset suppliers,” according to Nokia itself—it's not surprising that Nokia has deals on several fronts as well. Recently, Nokia's Stephen Elop noted that Nokia expects to bring in fully $653 million in patent licensing in 2013, so it's clear that Nokia's patents are a major money-making operation.

So, while the exact terms of the deal between Samsung and Nokia are likely to remain quiet, the whole thing should be quite expected. There's a lot going on behind the scenes here, and that behind the scenes action is something to keep in mind when considering any future developments. Indeed, even despite the fact that Nokia sold off its devices and service business for $7.2 billion to Microsoft (News - Alert) at last report—assuming, of course, nothing stops the sale before it’s ultimately completed—there's still quite a bit of value left in Nokia as a whole, and this deal may well be trying to call attention to that point.

The takeaway here is that not only does Nokia have quite a bit going on in terms of the wider field but also that patent licenses are a major part of the electronics business. It's likely to continue to be that way for some time to come, for better or for worse, and until then, there will be plenty more developments like this in the field.

Edited by Blaise McNamee
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