Nokia and Apple have finally settled a long-running patent dispute, with the US company Apple agreeing to make a one-off payment and continuing royalties to the Finnish mobile phone giant for infringing its technology patents.
It's a great result for Nokia, who felt that Apple had infringed on its technology patents, and this has now opened the door Nokia to go after phones comapnies that are using the Google's Android software.
Nokia’s stock rose as much as 4.1 percent in Helsinki trading. The agreement will bolster the Devices & Services unit's second- quarter profitability, Espoo, Finland-based Nokia said in a statement today.
Nokia has said that the payment will have a "positive financial impact" on its second-quarter financial results, where it had warned that they would only just break-even - that would suggest that the agreement is worth hundred of millions of dollars - although the terms of the details will remain confidental.
In a statement, Stephen Elop, president and chief executive officer of Nokia, said: “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.”
Nokia had taken the dispute to the International Trade Commission and attempted to get an import ban of Apple iPhones in the US due to patent infringements - Apple obvious made counterclaims against Nokia, but it seems that Apple has now agreed that they did infringe Nokia and are now having to pay. Under the agreement, both sides are withdrawing all their complaints to the ITC.
Florian Mueller, and industry insider, observed: “This is also very significant with a view to Android. Given that Android is in many ways a rip-off of Apple’s operating software, Android-based devices are highly likely to infringe on largely the same Nokia patents that Apple now felt forced to pay for.
“The deal structure is very telling: a combination of a payment for past infringement as well as running royalties is a clear indication that there’s serious money in this for Nokia.”
Mueller thinks the outcome is positive for Apple as it competitors will be paying considerably more than they had too: “This is a sweet defeat for Apple because its competitors - especially those building Android-based devices - will also have to pay Nokia, and most if not all of them will likely have to pay more on a per-unit basis because they don’t bring as much intellectual property to the table as Apple definitely did.
“So from a competitive point of view, I don’t think Apple loses much. On the bottom line its profitability may even benefit from this because Apple’s margins face no greater threat than Android-style commoditisation of smartphone technologies.”
An Apple spokesman said “We’re glad to put this behind us and get back to focusing on our respective businesses.”