Apple and Nokia bury patent hatchet

Well that didn’t last long. A fresh patent spat between Nokia and Apple which fired up at the back end of last year when Cupertino accused the former world number one mobile maker of making like a patent troll appears to have been resolved already.

The two companies said today they’ve reached agreement to settle all litigation pertaining to the dispute, inking a multi-year patent license.

Nokia will be getting an upfront cash payment, followed by further revenues over the term of the agreement. Its suit had covered a swathe of patents, including from NSN and Alcatel-Lucent (following its full acquisition of both), related to technologies including software, video coding, chipsets, display, UI and antenna.

The value of the arrangement is not being specified, and neither company is commenting publicly beyond a press release sent this morning — which states that under a “business collaboration agreement” Nokia will be providing “certain network infrastructure product and services to Apple”.

Apple will also resume carrying Nokia’s digital health products (formerly under the Withings brand) in its retail and online stores. These products vanished from Apple stores a few days after Nokia filed the patent suit.

The pair added they are also exploring “future collaboration in digital health initiatives”, and that “regular summits” will take place between top executives aimed at keeping the wheels of the reset relationship well greased.

In terms of where the value of the agreement will sit on Nokia’s balance sheet, it will appear partially as patent licensing net sales in the Nokia Technologies division, and partially as net sales in other Nokia business groups — reflecting the fact the payment is for product and services, not just patent settlement cash.

Nokia said it will follow its existing practices for disclosing patent licensing revenue in its quarterly announcements, and expects revenues for the agreement to start to be recognised in the second quarter of 2017, including an element of non-recurring catch-up revenue.

It also said that due to the up-front cash payment from Apple it will provide a “comprehensive update of its capital structure optimisation program” in conjunction with its Q3 results.

Commenting in a statement, Maria Varsellona, chief legal officer at Nokia, said: “This is a meaningful agreement between Nokia and Apple. It moves our relationship with Apple from being adversaries in court to business partners working for the benefit of our customers.”

“This agreement will strengthen our collaboration,” added Basil Alwan, president of Nokia’s IP/optical networks business, in another statement. “We look forward to supporting Apple.”

In its supporting statement, Jeff Williams, Apple’s chief operating officer, added: “We are pleased with this resolution of our dispute and we look forward to expanding our business relationship with Nokia.”

Nokia shares opened up around five per cent on the news of the settlement.