Nokia and Samsung extend patent deal, but for how much?

Nokia has chalked up a five-year extension on a patent licensing agreement with smartphone king Samsung.
Written by Liam Tung, Contributing Writer

Nokia has announced that Samsung has extended an existing patent licensing agreement with the company for a further five years.

Nokia hasn't said what patents are covered in the agreement, which was set to expire at the end of 2013.

There's no word yet on how much the deal is worth, although Nokia said that Samsung will pay "additional compensation" from 1 January 2014. The pair plan to hash out the amount of compensation through a binding arbitration process that is expected to wrap up in 2015.

"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," Paul Melin, chief intellectual property officer at Nokia, said in a statement.

Nokia's patent management activities will be handled alongside R&D by its newly formed Advanced Technologies business and is likely to become a major source of revenue for the company once the sale of its devices and services business to Microsoft proceeds.

During its third quarter results, Nokia said the unit currently brings in around €500m a year in revenue, a figure that excludes the €1.65bn it will get from Microsoft for a 10-year licensing deal once its acquisition of Nokia's devices and services unit goes ahead. 

Nokia last year launched a major legal assault on rivals in the smartphone business that weren't licensing its standards essential patents — including RIM, which settled early on, and HTC, which has fought Nokia's claims in courts in Europe and the US.

Nokia also secured a key patent victory over HTC in the High Court in London last week, and is now seeking a ban on HTC's flagship Android device, the HTC One. Nokia may also pursue bans on some HTC smartphones in the US after securing a favourable initial determination at the International Trade Commission.

Samsung wasn't included in that list of targets, and, as patents expert Florian Mueller notes, Nokia and Samsung have been working out a secretive agreement over patents in recent months.

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