Apple to pay Nokia to settle patent dispute

Nokia (NYSE:NOK) emerged the victor against Apple (NASDAQ:AAPL) in the companies' long-running patent dispute, with Apple agreeing to pay licensing fees to Nokia as part of a settlement.  

The conclusion of the nearly two-year-old patent dispute, which began in October 2009, ends all patent litigation between the companies. Apple and Nokia also agreed to withdraw their respective complaints against each other from the U.S. International Trade Commission.

As part of the settlement, Apple will pay Nokia a one-time payment as well as ongoing royalties for the length of the deal. Financial terms of the deal were not disclosed, but Nokia said it will have a positive financial impact on the company's revised second-quarter results. Nokia said in March that it had 46 patents claims against Apple in civil lawsuits and complaints with the ITC.

For its part, Apple said the agreement is limited in scope. "Apple and Nokia have agreed to drop all of our current lawsuits and enter into a license covering some of each other's patents, but not the majority of the innovation that makes the iPhone unique," Apple said in a statement, according to the New York Times. "We are glad to put this behind us and get back to focusing on our respective businesses."

Nonetheless, the settlement represents a clear victory for Nokia, which has lost market share and momentum to Apple in smartphones since the introduction of the first iPhone in 2007. Analysts at Nomura predicted Samsung and Apple will surpass Nokia in the second quarter in terms of smartphone unit shipments.

"Everybody pays license fees, that's how this industry has worked for 25 years, and now the setup with Apple isn't any different to what they have with the others," Martin Nilsson, an analyst with Handelsbanken, told Bloomberg. "It's in line with expectations that they resolved it and that Nokia became a net recipient."

For more:
- see this release
- see this NYT article
- see this Bloomberg article
- see this Reuters article

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