Nokia announces patent harmony about license renewals

As part of a renewal cycle that started in 2021, Nokia said that it has inked its seventh and last significant smartphone patent license agreement. The company has been pursuing these agreements for the past thirteen months. All legal proceedings between Nokia and Vivo have come to a conclusion with the signing of a multi-year, cross-licence patent deal encompassing 5G technology earlier this week. Following agreements of a similar nature with Honor and Oppo, this was Nokia’s third announcement of that kind in 2024. The business already had agreements in place with Huawei, Apple, and Samsung.

Following the most recent agreement, Nokia Technologies, the company that licenses smartphones, will go into a stable phase with no significant smartphone contracts expiring for a number of years. With catch-up net sales excluded, Nokia Technologies’s current annual net sales run-rate (contracted recurring net sales) is roughly €1.3 billion.

The company states that it will continue to concentrate on opportunities to increase the annual net sales run-rate through patent licensing in industries like automotive, consumer electronics, IoT, and multimedia in addition to the market for addressable smartphones. It hopes to reach a run-rate of €1.4–1.5 billion in the mid-term.

According to Nokia, large catch-up net sales of more than €400 million from earlier periods of non-payment are projected to boost its Q1 net sales. The figure has already been factored into Nokia’s FY2023 operating profit projections, which call for at least €1.4 billion in profit in 2024. According to Nokia, its patent portfolio, which consists of about 20,000 patent families—of which more than 6,000 have been deemed crucial to 5G—is based on almost €150 billion in R&D spending since 2000.

“We are delighted to have successfully completed our smartphone license renewal cycle. These seven major agreements demonstrate the strength of Nokia’s patent portfolio and the smartphone industry’s continued reliance on Nokia’s technology in their devices,” according to Jenni Lukander, president of Nokia Technologies. “Conclusion of our smartphone license renewal cycle will enable us to focus on growing our licensing run-rate in new areas. We have already made significant progress in these growth areas and have a strong pipeline of future opportunities.” 

Concluding the patent dispute

The parties terminated their litigation earlier this week when Nokia and Chinese smartphone maker Vivo announced the completion of a multi-year, cross-licence patent agreement covering 5G technologies. According to the deal’s exclusive conditions, Vivo will pay Nokia royalties and money to cover the dispute period beginning in 2021.

JUVE Patent sources claim that the original reason for the legal dispute between Vivo and Nokia was their inability to agree on a new license deal pertaining to 5G technologies. Vivo paid Nokia for the use of its proprietary 2G and 3G technology under a prior deal that ended in December 2021. Three Nokia standard essential patents (SEPs) were determined to have been infringed upon by Vivo in April 2023, leading the Regional Court Mannheim to grant Nokia an injunction against Vivo. In June 2023, Nokia began to implement the injunction while the Chinese corporation was filing an appeal. Later on, Vivo took its goods off the market.

In parallel, activities were taking on in Malaysia, the Philippines, China, India, and Malaysia. All litigation has concluded with the most recent licence agreement. Nokia also declared the conclusion of its legal dispute with Oppo and license agreements with Honor last month. Nokia and Oppo had been suing each other in patent courts throughout the world since 2021; however, all patent disputes were terminated by the global cross-licence agreement. According to JUVE Patent, they included actions in Germany, France, the Netherlands, India, China, and the UK, among five other nations.