On February 5th local time,Finnish communications equipment manufacturer Nokia announced that it has signed a multi-year patent cross-licensing agreement with Chinese smartphone manufacturer vivo.According to the agreement, vivo will pay royalties to Nokia and make additional payments during the dispute period. The agreement resolves all pending patent litigation between the parties in all jurisdictions. Specific terms of the agreement will remain confidential as agreed upon by both parties.
Jenni Lukander, president of Nokia Technologies, said: "This is the sixth major smartphone patent license agreement we have signed in the past 13 months, and we have now almost completed the smartphone license renewal cycle. Together, these license agreements demonstrate Nokia's significant contribution in developing key technologies that the entire smartphone industry relies on, and they will provide long-term stability to our licensing business for years to come."
Lukander added: "We are pleased to have reached an agreement with vivo, which reflects mutual respect for each other's intellectual property rights. vivo is one of the leading companies in the global smartphone industry. We look forward to bringing more innovations to users around the world through our cooperation."
Xu Xianwen, General Manager of the Legal Affairs Department of Vivo Mobile Communications Co., Ltd., said: "We are very pleased to have reached a global cross-licensing agreement with Nokia. The signing of this agreement reflects the recognition and respect of both parties for the value of each other's patents in the field of cellular technology. It also plays an important role in creating a positive development environment in the industry. We are committed to investing in the research and development of smart devices and smart services to provide excellent high-tech products and services to global users."
It is worth noting thatOn January 4 this year, Honor announced that it had signed a new patent cross-licensing agreement with Nokia, which covers the two parties’ basic inventions in 5G and other cellular technologies.
Not long ago, Honor CEO Zhao Ming said in an interview with the media, "We will regard Europe as our second home market in 2024. The core of it is to be able to follow the path of branding and high-end development in Europe like China."
Subsequently, on January 24, 2024, OPPO announced that it had signed a global patent cross-licensing agreement with Nokia, which covers the standard essential patents of both parties in 5G and other cellular communication technologies.
The parties will conclude all pending litigation in all jurisdictions upon execution of the Agreement. The specific terms of the agreement have also been kept confidential as agreed by both parties.
The reason why Nokia quickly and successfully reached patent cross-licensing agreements with Honor, OPPO and vivo at the beginning of this year is directly related to the first-instance judgment made by China’s Chongqing No. 1 Intermediate People’s Court in December last year on the case of OPPO v. Nokia’s standard essential patent royalty dispute.
According to the judgment of the Chongqing First Intermediate People's Court, the global fair, reasonable and non-discriminatory (FRAND) licensing rate for Nokia's 2G, 3G, 4G and 5G standard essential patent portfolio was confirmed, and the global cumulative rate for the 5G standard in the mobile phone industry was 4.341%-5.273%. The judgment is the world's first global licensing rate ruling for 5G-related standard essential patents issued by a Chinese judicial authority.
5G multi-mode mobile phone single unit license fee:
Zone 1: US$1.151/unit; Zone 2 (Mainland China) and Zone 3 (other countries and regions except Zones 1 and 2): US$0.707/unit;
4G multi-mode mobile phone single unit license fee:
Zone 1: US$0.777/unit; Zone 2 (Mainland China) and Zone 3 (other countries and regions except Zones 1 and 2): US$0.477/unit.
In this judgment, the value proportion of each generation standard of 2G, 3G, 4G and 5G in 5G multi-mode mobile phones was also determined. The corresponding value ratio of 5G-2G is 50:40:5:5.
Compared with 2018, Nokia announced a 5G patent fee standard of 3 euros per device. The latest judgment will allow relevant companies to reduce the patent licensing fee paid to Nokia significantly.
This ruling determines that the global cumulative rate of 5G standards in the mobile phone industry is 4.341%-5.273%, which means that for a US$200 5G mobile phone, the upper limit of the cumulative 5G patent fees charged by the whole machine is approximately US$10.55.(Including the total SEP authorization fees charged by other SEP licensors such as Nokia, Ericsson, Huawei, etc.), it is far lower than the total patent authorization fees required to be paid only according to the charging standards of Nokia, Ericsson, and Huawei.
It can be said that this judgment of Chongqing No. 1 Intermediate People's Court provides a reference standard for subsequent SEP patent licensing rate disputes related to the mobile phone industry. While safeguarding the interests of SPE patent licensees, it also effectively protects the rights and interests of global smartphone manufacturers, including Chinese smartphone manufacturers.
With the completion of patent technology licensing agreements with major global smartphone manufacturers such as Honor, OPPO, and vivo, Nokia stated that this is consistent with the assumptions disclosed for Nokia technology in its fourth quarter financial report released on January 25, 2024.
According to the fourth quarter financial report, Nokia's operating profit for the whole of 2023 was 1.688 billion euros, a year-on-year decrease of 27%. in,The operating profit of the technology business group responsible for patent licensing reached 734 million euros, accounting for 43.4% of the total operating profit.
Nokia will begin to recognize net sales from new patent licensing agreements with Honor, OPPO, vivo and other manufacturers in the first quarter of 2024, which will also include catch-up payments for the unpaid period before reaching a new agreement.
Nokia said its technology business group was confident of returning net sales to 1.4 to 1.5 billion euros in the first half of this year. Obviously, Honor, OPPO, and vivo will be the main contributors to this part of revenue.
Nokia said its industry-leading patent portfolio is built on approximately 150 billion euros of R&D investment since 2000 and consists of approximately 20,000 patent families, including more than 6,000 patent families declared essential for 5G.
Nokia contributes its inventions to open standards in exchange for the right to license those inventions on fair, reasonable and non-discriminatory (FRAND) terms. Other companies can license and use these technologies without significant investments in standards, driving innovation and the development of new products and services for consumers.