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Apple has settled a two-year-old legal fight with Nokia over a series of mobile phone related technologies. Exact terms of the settlement were not disclosed, but according to reports they require Apple to make a one-time payment large enough to materially improve the Nokia's earnings for the quarter as well as regular royalties in the future.
"We are very pleased to have Apple join the growing number of Nokia licensees," said Stephen Elop, the Nokia president and chief executive. "This settlement demonstrates Nokia’s industry-leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market."
For its part, Apple expressed relief over putting the issue behind and downplayed the agreement as limited in scope, emphasizing that it covers some of each other's patents but not "the majority of innovations that make the iPhone unique." Whatever the case, both companies have agreed to withdraw complaints against each other with the International Trade Commission and drop all outstanding patent litigation between the two.
The agreement represents a victory for Nokia and could allow it to monetize its patent portfolio going forward -- now that Apple has felt compelled to pay, other companies that might be infringing on the same patents will have to think hard whether to pay or pick a fight if Nokia's lawyers come knocking.
The dispute started in October 2009 when Nokia claimed that Apple was infringing on 10 patents, covering GSM, UMTS and wireless LAN technologies. Apple fired back with a countersuit in December 2009, charging Nokia with infringing 13 of its patents related to the iPhone. Earlier this year a judge with the U.S. International Trade Commission ruled that Apple was not in violation of five of Nokia's patents, but obviously the rest must have had some merit.
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