Nokia and LG agree smartphone patent licensing deal

Nokia and LG have settled on a patent deal - now they just have to work out for how much.

Another of the mobile industry's patent disputes has drawn to a close today with the announcement that Nokia and LG have signed a new licensing deal.

Nokia said on Tuesday that LG had agreed to a "royalty-bearing smartphone patent licence" from the company, covering Nokia's 2G, 3G, and 4G patents.

The royalty rate that LG will pay is to be agreed through commercial arbitration, a process that's likely to conclude in one to two years, Nokia said.

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"We are pleased to welcome LG Electronics to our licensing program. We've worked constructively with LG Electronics and agreed a mutually beneficial approach, including the use of independent arbitration to resolve any differences. This agreement sets the scene for further collaboration between our companies in future," Ramzi Haidamus, president of Nokia Technologies, said.

LG is the first smartphone maker to become a licensee since Nokia sold off its device business to Microsoft last year, and joins 60 other companies that have patent agreements in place with Nokia.

LG devices make up around 4.6 percent of all smartphones shipped globally, according to analysts Gartner.

Nokia's deal with LG follows the conclusion of a similar long-running patent licensing wrangle with another South Korean smartphone giant: Samsung. In 2013, Samsung signed a five-year extension to a patent licensing agreement. That deal is also in arbitration to decide the royalty rate Samsung has to pay for using Nokia patents, the result of which is expected this year.

Patents have become increasingly important to Nokia since the sale of its handsets business. Alongside its networking arm and its soon-to-be-sold Here mapping unit, patents and R&D is one of three remaining business strands for Nokia.

Nokia Technologies, the unit that looks after patents, saw revenue rise by 103 percent year on year in its most recent quarterly results. However, the business' costs were also on the up, thanks to what Nokia described as "increased activities related to anticipated and ongoing patent licensing cases".

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