Nokia’s previously downgraded second-quarter forecast just got a little brighter with a little help from an unlikely entity, namely Apple. The two companies today announced that they had settled a patent dispute, which resulted in a licensing agreement and a big payout to Nokia.
The dispute between Nokia and Apple has been an ongoing back-and-forth affair. In March, the International Trade Commission (ITC) ruled that Apple’s products did not violate Nokia patents for touchscreen, power and camera technologies, but Nokia didn’t give up. The company returned fire with yet another complaint. Today’s agreement was related to Nokia’s claims that virtually all Apple products violate seven of its patents for multi-tasking operating systems, data synchronization, positioning, call quality and the use of Bluetooth accessories.
According to a press release from Nokia, the agreement will result in settlement of all patent litigation between the companies, including the withdrawal by Nokia and Apple of their respective complaints to the ITC.
The financial structure of the agreement consists of a one-time payment payable by Apple and ongoing royalties to be paid by Apple to Nokia for the term of the agreement.
The specific terms of the contract remained confidential.
“We are very pleased to have Apple join the growing number of Nokia licensees,” said Stephen Elop, president and CEO of Nokia, in a statement. “This settlement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.”
Nokia said the agreement is expected to have a “positive financial impact” on Nokia’s recently revised outlook for the second quarter of 2011 of around break-even non-IFRS operating margin for Devices & Services.