BrandArena: Nokia, LG Agree to Smartphone Patent Licensing Deal

Wednesday 17 June 2015

Nokia, LG Agree to Smartphone Patent Licensing Deal

Nokia Technologies and LG Electronics have agreed to a smartphone patent licensing agreement, the companies announced on Tuesday. Under the terms of the deal, LG will pay royalties to Nokia for use of its patents on mobile communications.

The companies didn't say exactly what patent technologies LG has licensed from Nokia.

With the deal, LG has become the first company to join Nokia's mobile licensing program since the company sold its devices and services business to Microsoft for $7.2 billion. Nokia has approximately 30,000 patents. Those patents relate to 2G, 3G, and 4G mobile communications technologies, and are licensed by over 60 companies.

The deal highlights the importance Nokia still plays in the smartphone space. While the company no longer produces devices, its patent portfolio is broad and for some companies, a required resource, in order for them to build products.

The deal also suggests Nokia is now a critical behind-the-scenes player in how smartphones operate. When Nokia sold its smartphone business to Microsoft in 2014, the software giant agreed to pay $2.2 billion for access to Nokia's patent portfolio.

Neither LG nor Nokia have given any financial details, but it seems as though both parties remain confident that each is receiving a fair trade. Ramzi Haidamus, President of Nokia Technologies, explains: "We are pleased to welcome LG Electronics to our licensing program. We’ve worked constructively with LG Electronics and agreed a mutually beneficial approach, including the use of independent arbitration to resolve any differences. This agreement sets the scene for further collaboration between our companies in future."

LG is the first smartphone maker to become a licensee since Nokia sold off its device business to Microsoft last year, and joins 60 other companies that have patent agreements in place with Nokia.

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