Patent deal with RIM to help Nokia boost dire finances

Written by Reuters | Helsinki | Updated: Dec 22 2012, 08:05am hrs
Struggling Finnish mobile phone maker Nokia has settled its patent dispute with BlackBerry maker Research in Motion in return for payments, as it tries to exploit its trove of technology patents to boost its dire finances.

Terms of the agreement were confidential, but Nokia said on Friday it included a one-time payment to be booked in the fourth quarter, as well as ongoing fees, all to be paid by RIM.

Nokia is one of the industrys top patent holders, along with Qualcomm and Ericsson, having invested 45 billion euros ($60 billion) in mobile research and development over the past two decades. It has been trying to make use of that legacy to ensure its survival as it battles to recover ground lost in the lucrative smartphone market to the likes of Apple and Samsung.

With sales and cash reserves falling and its credit rating cut to junk over the past year, Nokia in October announced a 750 million euros convertible bond to help fund its fightback.

The agreement with RIM settles all existing patent litigation between the two companies, Nokia said, adding similar disputes with HTC and ViewSonic still stood.

This agreement demonstrates Nokias industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market, said Paul Melin, Nokias chief intellectual property officer.

Nokia has earned around 500 million euros a year from patent royalties in key areas of mobile telephony.

Some analysts have said it could earn hundreds of millions more if it can negotiate with more companies successfully. They estimated its June 2011 settlement with Apple was worth hundreds of millions of euros, but said the RIM agreement was likely worth much less because of lower BlackBerry sales.