updated 10:32 am EST, Mon November 4, 2013
Samsung payment to Nokia for patent licenses to be determined in 2015
Nokia has made an agreement with Samsung which lets the Korean manufacturer license part of Nokia's patent portfolio for five more years. The extension to an existing patent licensing deal, revealed today by Nokia, will allow Samsung to avoid any potential lawsuits from Nokia in the future, and at the same time provides Nokia with funds after it sells off its mobile device arm to Microsoft.
The new agreement renews the existing one for a five year period, one that would have expired at the end of this year. The new deal will cover five more years from January 1st 2014 onwards, though how much Samsung will pay is yet to be determined. The statement reveals that the amount itself will be "settled in a binding arbitration which is expected to be concluded during 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," notes Nokia chief intellectual property officer Paul Melin. Samsung is keen to avoid paying out for patent infringement, and has seen the high cost such legal action can have, with the company famously being forced to pay $1.05 billion in damages to Apple last year.
Once Nokia sells off its device section to Microsoft, it will be relying more heavily on its extensive portfolio of patents for revenue. ZDNet notes that it receives approximately 500 million euros ($675 million) per year in patent revenues, which will increase by 1.65 billion euros ($2.23 billion) as part of a 10-year deal with Microsoft once the sale goes through.