The Nokia-Apple Patent War 2.0 is over. This morning Nokia announced that it reached a patent-licensing and collaboration agreement with Apple. Nokia and Apple settled all litigation, and it seems they are now best friends by the tone of the press release.
Apple agreed to pay royalties for Nokia patents and Nokia will receive a one-time cash payment. But that’s not all, Apple will continue selling Nokia health products (former Withings) and will collaborate with Nokia on future health-related projects. Nokia will also sell Apple some network gear and services.
The numbers were not disclose, but will reflect on Nokia’s upcoming financial report. The one-time cash payment will be reflected in Nokia Technologies financials, as well as the ongoing royalties, but other benefits of the deal, like sales of network equipment, will be reflected in other segments of Nokia.
After a 5 month long litigation, where Nokia sued Apple in dozen of countries and Apple filed an antitrust complaint against Nokia, the Nokia-Apple Patent War 2.0 is over. Nokia seems to be the clear winner, getting cash, royalties, retail network for Health products, selling network gear and services to Apple, and making a perspective partner for future health projects.
The Helsinki Stock Exchange reacted with an over 6% surge in Nokia’s share price, the surge also happened in pre-market trading on NYSE. Check the full press release Nokia published this morning down below.
Nokia and Apple sign patent license and business collaboration agreement, settle all litigation
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.