Apple and Nokia have a long history of law disputes. Between 2009 and 2011 the two companies were at each other's throats, since Nokia sued Apple for patent infringement. The two-year battle ended with a settlement, which awarded Nokia a portion of the money for every iPhone sold to that date.
Back in December of last year, Apple filed antitrust lawsuits against some companies acting on Nokia's behalf, and the Finnish company answered with its own lawsuit directly against Apple. One one side, we had Apple, claiming that it has the right to use some Nokia patents, but the latter transferred the same patents to third-party patent assertion entities, in order to squeeze some cash from their tech. According to Tim Cook and company, this was “anticompetitive and abusive”. On the other hand, Nokia claimed that Cupertino company still owes it payments for patents used in Apple products.
Today, however, the two companies released a statement, saying that all litigation was settled, and they both agreed on a multi-year patent license. Additionally, Nokia will be providing “certain network infrastructure products and services” to Apple under a new business collaboration agreement between the companies. Apple, on the other hand, will resume the sale of Nokia health products, formerly known as Withings, in its retail and online stores.
“This is a meaningful agreement between Nokia and Apple,” said Maria Varsellona, Chief Legal Officer at Nokia. “It moves our relationship with Apple from being adversaries in court to business partners working for the benefit of our customers.”
Apple's COO, Jeff Williams also commented on the settlement. “We are pleased with this resolution of our dispute and we look forward to expanding our business relationship with Nokia,” he said.
Details of the agreement are kept confidential, but the statement confirms that Nokia will receive an up-front cash payment from Apple, followed by additional revenue during the term of the agreement. The value of said agreement will be reflected as patent licensing net sales in Nokia Technology, as well as net sales in other Nokia business groups. Nokia confirmed it will continue to disclose its patent licensing revenue in its quarterly announcements, and expects the first money from the agreement to appear in its Q2 2017 report, so we might get some numbers then.
In the meantime, we're sure both companies are glad that the second patent dispute between them has been brought to an end much faster than the first.
Nokia and Apple sign patent license and business collaboration agreement, settle all litigation
Stock Exchange Release
May 23, 2017 at 09:50 (CET +1)
Cupertino, California and Espoo, Finland - Nokia and Apple announced today that they have settled all litigation related to their intellectual property dispute and agreed a multi-year patent license.
"This is a meaningful agreement between Nokia and Apple," said Maria Varsellona, Chief Legal Officer at Nokia, responsible for Nokia's patent licensing business. "It moves our relationship with Apple from being adversaries in court to business partners working for the benefit of our customers."
Under a business collaboration agreement, Nokia will be providing certain network infrastructure products and services to Apple. Apple will resume carrying Nokia digital health products (formerly under the Withings brand) in Apple retail and online stores, and Apple and Nokia are exploring future collaboration in digital health initiatives. Regular summits between top Nokia and Apple executives will ensure that the relationship works effectively and to the benefit of both parties and their customers.
"We are pleased with this resolution of our dispute and we look forward to expanding our business relationship with Nokia," said Jeff Williams, Apple's chief operating officer.
"This agreement will strengthen our collaboration," said Basil Alwan, President of Nokia's IP/Optical Networks business. "We look forward to supporting Apple.
While details of the agreement remain confidential, Nokia will receive an up-front cash payment from Apple, with additional revenues during the term of the agreement.
The value of the agreement will be reflected partially as patent licensing net sales in Nokia Technologies and partially as net sales in other Nokia business groups. Nokia will follow its existing practices for disclosing patent licensing revenue in its quarterly announcements and expects that revenues for the agreement will start to be recognized in the second quarter of 2017, including an element of non-recurring catch-up revenue.
Due to the up-front cash payment from Apple, Nokia intends to provide a comprehensive update of its capital structure optimization program in conjunction with its third quarter 2017 results.
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