Microsoft’s acquisition of Nokia’s handset unit was given the green light by China earlier today. China’s Ministry of Commerce had approved the deal after being assured by Nokia that the acquisition wouldn’t result in patent abuse. Nokia has since reaffirmed their licensing commitments to essential patents.
The Nokia that’s left after Microsoft acquires the handset division is one that could potentially become a patent troll. The Microsoft-Nokia deal has Microsoft acquiring the entire Devices & Services business at Nokia. That’s the unit responsible for producing feature phones and smartphones. The Nokia that remains will consist of the Here mapping unit, the Nokia Solutions and Networks division and the advanced technologies unit. Nokia retains their vast patent portfolio.
That patent portfolio is the result of two decades worth of work in wireless communication technology. Nokia's research and development into various technologies has produced a portfolio of patents that are deemed standard essential patents (SEPs).
SEPs are currently licensed by Nokia to over 60 companies on fair, reasonable and non-discriminatory (FRAND) terms. These agreements ensure that companies don’t need to reinvent the wheel to produce a product by licensing Nokia’s patents. Nokia collects royalties for the hard work that went into the research and development of fundamental technology. It’s usually a win-win for most companies.
Patent trolls are entities that enforce and collect royalties over patents they own. Typically you hear of companies like this getting money from other companies, but without producing any actual products using those patents. The fear among some competitors (cough, Samsung/Google, cough) was that the Nokia after the acquisition would become a patent troll.
Nokia has laid those fears to rest with the Chinese government, which is why the Ministry of Commerce in China approved the deal. Nokia has also reaffirmed their stance and commitment to license SEPs.
This means we hopefully won’t be writing about Nokia the patent troll in 10 years. Now we wait for Microsoft and Nokia to finish things up.
Thanks for the tip @misangenius!