Nokia patent deal with RIM to lift finances

HELSINKI Fri Dec 21, 2012 8:00pm IST

A man using his mobile phone walks under a Nokia logo in Shanghai December 6, 2012. REUTER/Aly Song/Files

A man using his mobile phone walks under a Nokia logo in Shanghai December 6, 2012. REUTER/Aly Song/Files

Related Topics

Stocks

   
A statue of Ganesh, the deity of prosperity, is carried in a taxi to a place of worship on the first day of the ten-day-long Ganesh Chaturthi festival in Mumbai August 29, 2014. REUTERS/Danish Siddiqui

Ganesh Chaturthi Festival

During Ganesh Chaturthi idols will be taken through the streets in a procession accompanied by dancing and singing, and will be immersed in a river or the sea in accordance with Hindu faith.  Slideshow 

HELSINKI (Reuters) - Struggling Finnish mobile phone maker Nokia (NOK1V.HE) has settled its patent dispute with BlackBerry maker Research in Motion RIM.TO in return for payments, as it tries to exploit its trove of technology patents to boost its dire finances.

Terms of the agreement were confidential, but Nokia said on Friday it included a one-time payment to be booked in the fourth quarter, as well as ongoing fees, all to be paid by RIM.

Nokia is one of the industry's top patent holders, along with Qualcomm (QCOM.O) and Ericsson (ERICb.ST), having invested 45 billion euros in mobile research and development over the past two decades.

It has been trying to make use of that legacy to ensure its survival as it battles to recover ground lost in the lucrative smartphone market to the likes of Apple (AAPL.O) and Samsung (005930.KS).

With sales and cash reserves falling and its credit rating cut to junk over the past year, Nokia in October announced a 750 million euros convertible bond to help fund its fightback.

The agreement with RIM settles all existing patent litigation between the two companies, Nokia said, adding similar disputes with HTC Corp (2498.TW) and ViewSonic still stood.

"This agreement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market," said Paul Melin, Nokia's chief intellectual property officer.

Nokia has earned around 500 million euros a year from patent royalties in key areas of mobile telephony.

Some analysts have said it could earn hundreds of millions more if it can negotiate with more companies successfully.

They estimated its June 2011 settlement with Apple was worth hundreds of millions of euros, but said the RIM agreement was likely worth much less because of lower BlackBerry sales.

"Not hundreds of millions," said Martin Nilsson, analyst at Handelsbanken, when asked for an estimate on the settlement. He added the news was positive, if not surprising.

"More or less, when companies like Ericsson, Qualcomm or Nokia go into negotiations, they end up net winners."

Nokia shares fell 3 percent to 3.07 euros by 1000 GMT. They have been retreating in the past few sessions from their strong surge of the past month.

They rose around 40 percent over the month through Tuesday on speculation its new Lumia smartphones were selling well. Analysts have warned the phones appeared sold out in many stores as supplies were short to begin with. (Reporting by Ritsuko Ando; Editing by Mark Potter and David Cowell)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Tech for health

Reuters Showcase

Wearable Gadgets

Wearable Gadgets

Swatch prefers go-it-alone route for smartwatch plans.  Full Article 

Google Drones

Google Drones

Google tests drones for deliveries.  Video 

New iPhone

New iPhone

Apple working with NXP for pay-by-touch technology in new iPhone - FT.  Full Article 

Legal Case

Legal Case

Bitcoin promoter to plead guilty to unlicensed money transmission.  Full Article 

Online Crackdown

Online Crackdown

China's Tencent shuts messaging accounts after censorship rules - state media.  Full Article 

Hot Commodity

Hot Commodity

Data scientists are increasingly becoming important to the world's tech companies.  Video 

Agriculture App

Agriculture App

CME Group smartphone game lets students "beef up" on ag economics.  Full Article 

Copyright Dispute

Copyright Dispute

Oracle loses bid to restore $1.3 bln SAP verdict, could get new trial  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage