Nokia strikes another litigation-free patent deal

The Finnish kit maker has just done a deal with Huawei's smartphone spin-off Honor that covers both companies' inventions relating to 5G and other cellular technologies. Full terms of the deal are confidential.

Nokia says it has no fewer than 20,000 patent families in its stable, including 6,000 that have been declared as essential to 5G. It claims to have spent €140 billion on R&D since 2000, and like most telco vendors is a backer of the fair, reasonable and non-discriminatory (FRAND) approach to standards-essential patent (SEP) licensing.

"We are delighted to have concluded an amicable patent cross-license agreement with Honor, one of the leading players in the Chinese smartphone market," said Susanna Martikainen, chief licensing officer, mobile devices, at Nokia. "It is the fourth major litigation-free smartphone agreement that Nokia has concluded over the past twelve months and highlights once again the strength of Nokia's patent portfolio and decades-long contributions to cellular standards and other technologies."

Indeed, last June, Nokia signed a multi-year 5G patent deal with Apple, extending an agreement that was due to expire at the end of last year. In January last year, it struck a similar deal with Samsung, following the expiry of their previous agreement at the end of 2022. Before that, in December 2022, Nokia also renewed a patent-licensing agreement with Huawei.

As is all too common in this industry though, these agreements aren't always reached amicably.

Nokia is currently embroiled in patent disputes with three other Chinese device makers – Oppo, Vivo, and Oneplus. In each of these lawsuites – which were filed in 2021 after the two sides failed to agree terms for new licensing agreements – Nokia won injunctions in Germany, leading Oppo, Vivo and OnePlus to withdraw their products from sale there.

Nokia warned in late December that it will miss its 2023 financial targets, which were based on the assumption that outstanding licence renewals would be concluded before the year's end. That has proved not to be the case, meaning it wall fall short of its net sales, operating margin and free cash flow projections.

Nokia will present its fourth quarter and full-year results on 25 January.

As for Honor, the deal might just help to strengthen its appeal to potential investors ahead of its hotly-anticipated IPO. Following its spin-off from Huawei in 2020, Honor has since established itself as China's biggest smartphone maker.

According to analyst firm IDC, Honor overtook Vivo in Q3, capturing 19.3 percent of the market, driven by the appeal of its three new foldable models.

"As both 5G SEP holder and implementer, Honor highly respects IP rights and strongly believes that reasonable value of IP is important to the development of mobile industry," said Wenyu Zhou, head of global intellectual property at Honor. "The conclusion of the patent cross-license agreement shows Honor's commitment on innovation to enabling a smart life across all scenarios and all channels, for all people."