Apple has agreed to pay Nokia a settlement in their patent litigation as well as signing a licensing agreement with the under-pressure Finnish mobile giant.
The patent litigation between Nokia and Apple dates back to 2009 and last December the companies extended the argument outside of the US to Germany, the Netherlands and the UK. Nokia however has announced today that the legal battle is now over. “Nokia announced that it has signed a patent license agreement with Apple. The agreement will result in settlement of all patent litigation between the companies, including the withdrawal by Nokia and Apple of their respective complaints to the US International Trade Commission.” The financial structure of the agreement consists of a one-time payment payable by Apple and on-going royalties to be paid by Apple to Nokia for the term of the agreement – though the specific terms of the contract are confidential.
Stephen Elop, the under-fire CEO, was obviously delighted with the result of the settlement: “We are very pleased to have Apple join the growing number of Nokia licensees. This settlement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.” The patents which caused all the trouble related to touch interfaces, display illumination as well as 3G and Wi-Fi technology. Earlier this month, Nokia revised its outlook for the second quarter of 2011 to say that it will just about break even, but in a statement said this settlement will have a positive financial impact on these results. Nokia in the last 20 years has invested more than €43 billion in research and development and holds over 10,000 patent families making it one of the wireless industry's strongest and broadest IPR portfolios.
While the news is certainly welcome for Nokia, the company still has a big battle on its hands to return to the type of success it enjoyed prior to losing ground to Android and Apple in the smartphone market.