Nokia Gets Samsung Patent Ruling, Sees Positive Impact

Nokia Oyj received a positive arbitration court decision in a patent dispute with Samsung Electronics Co. that will bolster the revenue it generates from its intellectual property portfolio.

The decision by a court of the International Chamber of Commerce settles the amount of additional compensation payable to Nokia for a five-year extension of a licensing pact between the companies, Nokia said Monday in a statement. It didn’t give financial details, though said it patent-licensing business now has a annual revenue run rate of about 800 million euros ($870 million). Nokia’s technologies division, which licenses its patents, had fourth-quarter sales of about 400 million euros and full-year 2015 sales of about 1.02 billion euros, it said.

Nokia is the latest wireless-equipment maker to settle a patent dispute with a handset maker challenging the value of patents it uses to make smartphones. The high-margin sales made from licensing such technology is crucial to boosting profitability, especially when operators are spending less on wireless infrastructure equipment. Swedish rival Ericsson AB and Apple Inc. settled a legal dispute in December over mobile-device patents.

Nokia’s technologies unit generated about 20 percent of the company’s 475 million euros of third-quarter operating profit with an operating margin of 58 percent, far above the 13.6 percent generated by its networks business. Nokia is set to report fourth-quarter earnings Feb. 11.

The shares are little changed this year, giving the company a market value of about 36 billion euros.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE