Its patent group now has a sales run-rate of approximately €1.3 billion and is expecting significant catch-up payments
Nokia announced that it has signed its seventh and final major smartphone patent licence agreement it has been pursuing over the past thirteen months as part of a renewal cycle that began in 2021. Earlier this week, Nokia and Vivo signed a multi-year, cross-licence patent agreement covering 5G technologies, which ends all litigation between the parties. This was the third such deal announced by Nokia in 2024 alone, after similar agreements with Honor and Oppo. The company already had deals with Samsung, Apple and Huawei in the bag.
As a result of the latest deal, Nokia’s licensing business, Nokia Technologies, will now enter a period of stability with no major smartphone agreements expiring for several years. Nokia Technologies currently has an annual net sales run-rate (contracted recurring net sales) of approximately €1.3 billion, excluding catch-up net sales.
In addition to the remaining addressable smartphone market, it will continue to focus on opportunities to grow the annual net sales run-rate through patent licensing in areas such as automotive, consumer electronics, IoT and multimedia, to reach a run-rate of €1.4-1.5 billion in the mid-term, according to the company.
Nokia said its Q1 net sales are expected to benefit from significant catch-up net sales of more than €400 million related to prior periods of non-payment. The number has already been worked into Nokia’s FY2023 assumptions of generating at least €1.4 billion of operating profit in 2024. Nokia said its patent portfolio is built on around €150 billion invested in R&D since 2000 and is composed of around 20,000 patent families, including over 6,000 patent families declared essential to 5G.
“We are delighted to have successfully completed our smartphone license renewal cycle. These seven major agreements demonstrate the strength of Nokia’s patent portfolio and the smartphone industry’s continued reliance on Nokia’s technology in their devices,” said Nokia Technologies president Jenni Lukander. “Conclusion of our smartphone license renewal cycle will enable us to focus on growing our licensing run-rate in new areas. We have already made significant progress in these growth areas and have a strong pipeline of future opportunities.”
Wrapping up patent litigation
Earlier this week, Nokia and Chinese smartphone vendor Vivo announced the signing of a multi-year, cross-licence patent agreement covering 5G technologies, which ends all litigation between the parties. The terms of the deal – which remain confidential – mean Vivo will make royalty payments, as well as payments to cover the dispute period from 2021, to Nokia.
According to JUVE Patent sources, litigation between Nokia and Vivo originally arose when they could not decide on a new licence agreement regarding 5G technologies. A previous agreement, where Vivo paid Nokia for use of its patented 2G and 3G technologies, had expired in December 2021. In April 2023, the Regional Court Mannheim found that Vivo infringed three Nokia standard essential patents (SEPs), resulting in the court granting the latter an injunction against Vivo. While the Chinese company appealed, Nokia then enforced the injunction in June 2023. Vivo later removed its products from the market.
Parallel proceedings were also ongoing in India, China, Malaysia and the Philippines. The latest licence deal has ended any pending litigation. Last month, Nokia also announced licensing deals with Honor, as well as the end of litigation with Oppo. Since 2021, Nokia and Oppo had sued each other in patent courts globally, with the global cross-licence agreement ending all patent lawsuits. This included actions in Germany, France, the Netherlands, India, China and the UK, as well as five other countries, according to JUVE Patent.