Court issues ruling in Nokia, LG Electronics’ smartphone patent case

The International Court of Arbitration of the International Chamber of Commerce has issued its award for the binding arbitration between Nokia and LG Electronics. The companies had previously agreed that this would settle the royalty payment obligations for the royalty-bearing smartphone patent license from Nokia Technologies announced in June 2015. 

While details of the arbitration award and license agreement remain confidential, Nokia will follow its existing practices for disclosing patent licensing revenue in its quarterly announcements and expects that revenue for the agreement will be recognized in the third quarter of 2017, including an element of non-recurring catch-up revenue, with additional revenues expected during the term of the agreement. 

“The use of independent arbitration to resolve differences in patent cases is a recognized best practice. We believe that this award confirms the quality of Nokia’s patent portfolio,” said Maria Varsellona, chief legal officer at Nokia. “We continue to see potential for additional licensing opportunities in the mobile communications market and beyond.”

In mid 2015, Nokia announced LG Electronics had agreed a deal to use the former’s smartphone patent license though royalty payments were to be settled in later in what it described as “a lengthy arbitration process” which was expected to take about 2 years.

At the time, Nokia had just sold its phone business unit to Microsoft the previous year, in order to focus on its telecoms network equipment business while retaining its handset patents.

The previous year before the deal was signed (that’s in 2013), Nokia’s patent unit had generated sales of US $649 million.


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