On the heels of the Apple/Microsoft-backed Rockstar Consortium suing Samsung and Google over old Nortel patents Rockstar now owns, Samsung is tying up patent negotiations on another front. Today Flinland’s Nokia announced that it has extended a patent license agreement with the Korean handset giant for another five years, and that the two had entered into binding arbitration to settle additional compensation related to this, expected to be concluded in 2015.
The agreement would have expired at the end of 2013, Nokia notes, and Samsung’s compensation payments will begin January 1, 2014.
The financial terms of this deal, and exactly what the patent agreement covers, are unknown. In fact, that seems to have been one of the most defining aspects of it.
The negotiations, per Florian Mueller, go back several months and the details for them, as well as for the previous patent deal between Samsung and Nokia, have never been disclosed, under the terms of strict NDAs. One twist is that they made an appearance in Samsung’s ongoing patent case with Apple: apparently during the negotiations for the deal announced today, Samsung told Nokia that it had learned of the details of its deal with Apple — another existing patent agreement that has not been detailed to the public.
We have reached out to Nokia, and looking elsewhere, to see if we can get more details. (Judging by all of the above it looks like the chances are slim.)
One positive of this agreement between Nokia and Samsung is that it means one less patent case hurtling towards the courts. “This extension and agreement to arbitrate represent a hallmark of constructive resolution of licensing disputes, and are expected to save significant transaction costs for both parties”, said Paul Melin, Chief Intellectual Property Officer of Nokia, in a statement.
Aside from this, however, on Samsung’s side, this could be a calculated move to show to the market that despite Rockstar move last week, the company is still moving ahead in negotiating and closing deals to shore up its own patent position. It can use this to help fight against Apple and others in existing litigation.
On Nokia’s side, it’s a sign to the market that there is some significant value left in its remaining business, after the sale of the devices and services division to Microsoft for $7.2 billion (assuming the sale goes through).
When Nokia announced the Microsoft deal, the retention and future licensing of its existing patents was one of the key features it played up when describing how Nokia’s business would develop going forward. Specifically, the patents would exist as part of the company’s Advanced Technologies business, which would license and continue to build out the company’s patent portfolio. Whether you want to call Nokia a patent enforcer or mobile innovator or patent troll, that’s what it is doing here.
Earlier this year, Nokia CEO Stephen Elop estimated that Nokia will make $653 million in patent licensing in 2013.
Update: Got a response from Nokia. “The terms of our license agreements are confidential,” a spokesperson reiterated, adding that Nokia currently has deals with 50 companies, “including most of the major handset suppliers.”