Nokia sued Apple in December with an extensive lawsuit regarding patented smartphone technology. The Finnish telecoms firm alleged Apple breached 32 of its patents covering smartphone features including displays and encoding technologies. As one of the pioneers of the mobile phone revolution, Nokia holds scores of patents related to handsets.
Rather than battle it out in the courts, Apple and Nokia today announced they’re taking the unusual step of putting the lawsuit aside. The two firms have come to a “business collaboration agreement” and signed a new deal that should end up benefitting them both.
Apple will now be able to use Nokia’s patents without risk of further infringement. For its part, Nokia will see its healthcare products officially stocked in Apple stores, exposing them to thousands of consumers. Apple withdrew the entire range from sale days after Nokia initiated the lawsuit in December. Nokia will also receive an up-front annual cash payment expected to be in the “hundreds of millions” of dollars.
The duration and financial particulars of the multi-year license arrangement haven’t been disclosed. Speaking to the BBC, analysts suggested that the royalties will be significant to Nokia but likely to be relatively unnoticeable to Apple. It’s believed to have made around $140 billion of revenue from iPhone sales last year. Even a tiny percentage paid to Nokia would represent a substantial payment.
Apple and Nokia said the decision to abandon the lawsuit has come out of a desire to strengthen their collaboration and work to help their customers. Rather than spend money on court fees and damages, the two firms can get back to innovating and developing new products.
“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.”
Apple said it is “pleased” with the outcome of the lawsuit. The company added it is looking forward to working with Nokia in a more amicable arrangement in the future. It will be sourcing “certain network infrastructure product and services” from the communications giant.
“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.
Apple also mentioned that the two firms are exploring a future collaboration in the healthcare sector. This suggests that the tech Nokia acquired from Withings could make its way into future Apple products, such as HealthKit and Apple Watch. The arrangement could go the other way too, giving Nokia’s devices integration with Apple’s existing healthcare platforms.
With both firms presenting themselves as keen to put the lawsuit in the past, the door’s now open to interesting joint partnerships in the future. Details of the licensing agreement remain confidential but analysts may be able to glean some information from Nokia’s patent licensing revenue filings in its next quarterly reports.
