Nokia: No plans to become a patent troll after deal with Microsoft

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.

Source: Nokia

Thanks for the tip @misangenius!

Sam Sabri
  • I was hoping they would! Nokia deserves that money!
  • No. Patent trolls are terrible.
  • But IP thieves are worse.
  • Unless the people deserve it...
  • Did you bother to read the article? These patents weren't purchased by Nokia. The patents were earned by actually inventing the technology and applying it to their own products. They have agreed to continue to provide licenses at fair prices (unlike Google's attempt to extort money out of Microsoft for the Xbox 360 based on Motorola patents they bought). Nokia deserves to get reimbersed for the work they did. That is NOT the definition of a patent troll.
  • dasfoto - I agree with you. Nokia's patents were developed (and often used) in house. My take on a patent troll is a company that purchases another company for their patents (can anyone say Google and Motorola?). Google is more likely to become a patent troll than Nokia.
  • I concur, and if ms plans to collect on Nokia patents that would make good business no?
  • Fndlumia - MS has purchased the rights to use Nokia patents for 10 years. MS cannot collect on Nokia patents.
  • Not quite. It's perfectly legitimate for a company to be a patent broker, which is to purchase and license patents to other companies. That actually helps innovation by allowing inventors to focus on invention, and manufacturers to focus on manufacturing. A patent troll is one that tends to hide that they own (often vague and unlikely to hold up in court) patents until a manufacturer is about to release (or already has released) a product, and then threaten a lawsuit in order to get a payment on something worthless, since it is cheaper to pay them off then to fight a lawsuit.
  • I see nothing wrong with acquiring patents and enforcing them. Companies spend a lot of money to acquire intellectual property. I also see nothing wrong with enforcing and licensing patents without making a product. Is an inventor entitled to nothing just because he or she is not a manufacturer? That's ridiculous. The term "patent troll" is nothing more than an attempt to attach negative feelings to a company you don't like. If you don't like a Republican, you call him or her a "fundamentalist." If you don't like a Democrat, you call him or her a "socialist." If you don't like poor people, you call them "takers." And if you don't like a large company that earns billions of dollars licensing patents, you call the company a "patent troll."
  • The term you're looking for is "dysphemism".
  • Okay, I know I'm a little late to the conversation, but here's the thing from my perspective: Patents are granted for ideas that may have merit.  Whether the device/technology/process/etc. described in the patent actually becomes a real thing or process is irrelevant to the USPTO, as it's purvue is to protect ideas.  If you doubt that, just look at some of Apple's patents, and notice how some of them describe technologies that do not exist or may never exist. So, let's say I have a patent for some technology that magically lets any device I own actual know I am the one holding it through some combination of biometrics, voice recognition, and facial recognition in a passive capacity (i.e. I don't have to do anything to initiate this recognition, the device is always scanning passively).  Now, while I don't have the funds to develop this into concrete functional technology, I have described the potential technology in my patent application in such detail as to show how it would work if all the components were in place; thus why the patent was granted. Okay, now, some consumer electronics manufacturer  decides they want to create a device like the Lawgiver from the Judge Dredd universe -- but not a gun, rather something that will not function unless it's owner is the one using it.  They successfully bring such a product to market, but right after it's launched, I file a lawsuit alleging patent infringement. Legally, I would be enforcing my patent, because they stole my idea.  But the reason most people would see me as a "patent troll" is because I never did anything with the patent; I never put it to practical use.  Rather, they would allege, I just sat on it, waiting for someone else to spend their R&D dollars on turning the idea into a physical reality, to come along at the last minute and profit on their actual work. It is a bit shady, even if it's legal.  And one of the current arguments on improving the USTPO and the process of obtaining a Patent, is that the patent holder must also be able to apply the patent in a practical manner; only then should the patent application be approved. So, in my opinion, calling someone a "patent troll" is not just based on whether you have negative feelings for them or not; it's also based on whether or not the patent holder reasonably attempts to work with the company attempting to realize their patent, or just sits in the shadows waiting to pounce once the work is all done.
  • Nokia certainly deserves that money. But there's a strong difference between a troll and a license deal - one is reasonable, the other is not.
  • So was I...
  • Don't worry. Nokia will not sit idly while other OEMs steal their patents. ;)
  • I'm not a business man and I am far from having the acumen of one, but if Nokia is able to succeed by keeping to their principles, something that even Google have pledged but failed miserably, I'll be extremely happy.
  • Nokia -google.two differrent worlds and mentalities
  • good guy nokia!! my respect for them is now extremely high!!
  • Yes. Nokia is awesome like that.
  • Yes, Nokia deserve the money. But they already get those money from licensing SEP in FRAND terms. If they go to patent-troll route, it would only hampers their reputation.
  • Agreed
  • It's not possible for Nokia to be a troll as they've spent 10s of billions on R&D to develop their IP that has created the entire smartphone industry.  Trolling is someone who uses the threat of litigation (often on weak or dubious patents) to force IP payments usually against startup companies that can ill afford the litigation expense.  You can tell a Troll by the fact they they almost never go to litigation as more often than not they will lose.  It is distressing how this term is purposely abused by parties such as Google and Samsung who knows they are themselves guilty of extensive IP infringement and are trying to obfuscate and deprive the IP holder of his proper property rights....they would like for the issue to go wont. Nokia has to date won its litigation against both Apple and HTC (first of the android OEM) based on the merits of their case; these are real patents invented by Nokia over decades that others have stolen.  Now its time for them to pay.  There can be issue of trolling in this case where Nokia invented and patented the technology themselves. Nokia will monetize its IP portfolio.  For SEP, all it needs is for people who are currently stealing to pay up...Nokia has never had a problem wrt to FRAND principles for SEP IP.  For non-SEP, the sky is the limit as they say. Nokia may well become the next Qualcomm based on its IPs alone...
  • I thought patent trolls are those law firms who buys patents in order to use them to sue.
  • You're correct there, sort of. In this case, since they are liquidating the part of the company that uses their patents to create the products the patents protect, (mobile phones, namely) the "concern" Samsung and the like expressed was that Nokia would just start suing companies using their patented IPs while simultaneously not creating products based on them. Patent troll.
  • freestaterocker, I respectfully disagree. The fact that they no longer build products based on their patents does not make them a patent troll. They spent large sums of R&D money to produce the technology that goes into those patents. They deserve to make a profit off of that R&D work. If they license these under FRAND terms as they promise to do (and have been doing), that is not patent trolling. I would also contend that not producing a product does not necessarily make a company a patent troll. If a company spends money inventing something - not dreaming up an idea but actualy inventing something - even if it never goes into production at their company, they deserve to patent the work and get paid for it. This happens all the time at Universities around the world. They do research and invent a process or actual devices, but they never go into prodcution, but instead, license it to other companies to manufacture. That is not trolling.
  • Same. Where they buy patents to things that don't exist and they don't intend to produce, only to screw over the person who eventually does come up with it.
  • Well .. To be more specific, if Nokia chose to abusing their patents, we can call Nokia patent bully (like IBM did). Both patent troll and bully are equally infamous.
  • Just need green signal from India and we are good to go. Will Microsoft keep the Nokia name?
  • No. They are not allowed to use the Nokia brand on any smartphone. Only on phones based on the S30 and S40 series (dumbphones and Asha)
  • Hmm I thought Microsoft was dropping the Nokia name by choice. At least that's what I remember reading. People were even saying it was a bad move for Microsoft to drop the Nokia name because of it's recognition. Posted via the WPC App for Android!
  • I thought they had the license to use the Nokia brand name for 10 years after the acquisition or am I mistaken? It would be a bad mistake to not use it. Never mind, read the comment below that cleared it up.  
  • I could be wrong, but I believe the 10 years has to do with use of Nokia patents without paying royalties. They do not get to use the Nokia name on the Lumia smartphones.
  • I hope you're right man. I would love to see them to rebrand it to just "Lumia" instead of "Nokia Lumia". Like the Surface and Xbox. I'm waiting for them to confirm whether they keep the Nokia name for high-end or not. I will buy the next Lumia either way though.
  • If MS continues with X series, what would they be branded as? MS X?
  • They didn't buy the Nokia name, but I believe they can use Lumia for 10 years
  • Microsoft bought the Nokia handset division. Nokia can't make no handset with any name. Posted via the WPC App for Android!
  • As I remember MS will license the Nokia name but only in feature phones and Asha. This implies that MS have a choice to do so in smartphones but will not due to the fact that they want to unify their branding across thus using only the Lumia name.(if I'm wrong somewhere please don't sue me) LOL
  • No. Let me get that straight:
    - Microsoft bought the names Lumia and Asha. They own the brands from the moment the deal closes until they deem right to replace them. They become property of Microsoft.
    - Microsoft is granted a license to use the Nokia brand on Microsoft produced phones for 10 years BUT ONLY on phones based on the S30 and S40 series (dumbphones and the Asha line)
    - Nokia, because it's still an independent company, keeps their brand, obviously. However they are not allowed to use it on smartphones they produce or to license the name to any other OEM for them to use on smartphones until 2016. After 2016 Nokia can return to the OEM business and produce Nokia branded smartphones or license their brand to another OEM for the same purpose.
  • 2016 seems too soon in my opinion.
    I would think Microsoft would want to avoid former Nokia employees returning back to Nokia in 2016. I think Nokia got the better end of this deal.
  • Ya I agree but at the same time the phone biz will have changed and R&D is very expensive so they will need a lot of free cash to get going again.
  • So does this mean that there won't be any Nokia "smartphones" until 2016?
  • Not really, India already approved on anti-trust.  The tax issues are a separate issue that will not stop the deal from closing.  From what I've read, Nokia has finally gotten tired of Indian tax extortion based on dubious 'retroactive' tax law changes; they are going to shut down that plant and the indian subsidiary that holds it (valuation around 300m) and write it off. Indians have really own goaled themselves on this...but that's what comes from attempted highway robbery.  They've tried the same retroactive tax law changes with Vodafone and other international companies...all with the same dismal flight, cases thrown out of supreme court, a scramble to retrotractively change more laws in a futile attempt to make an illegal taking into something semi-legal lol.  They actually changed the tax law going back 30 years just to try and entrap Vodafone....ridiculous people
  • Probably won't. It will be microkiasoft
  • Doubtful, they'll roll the top ends under the "Surface" brand and start working on a separate lower tier line, probably call it "Sides" or "Bottom." But I think "Ghetto Gear" is still available and catchy.
  • Hopefully in 10 years you'll be talking about Nokia the giant mobile manufacturing business that reborn from the ashes of a disastrous partnership with Microsoft ;) In any case, I don't really understand Samsung's fears. They should actually be satisfied that not only Nokia is going out of the phone business and so it's no longer a threat, but that they will now be able to get their hands on patents such as PureView that they formerly couldn't get. Samsung could actually be the one benefiting more from this deal as they get access to tools to reinforce their dominant position. On the other hand I do hope Nokia will be less complacent with violation of non-SEPs. If they don't have a license, sue them. Be them Microsoft, Apple, Samsung or any other company.
  • "In tech news, the once famous company, Nokia, after years of struggle, have signed a deal with Microsoft to a complete acquisition." "In other news, a local lawyer died of a heart attack during a case shortly after the announcement. Police are investigating a correlation."
  • Don't worry if that was to happen I would make sure I would bring Microsoft down to Hell with me ;P
    And Microsoft will not buy Nokia. It was hard enough to convince the Board to this acquisition let alone the entire company. And fortunately, the ape that shouted his way into this deal is no longer in charge. Nadella is a much more intelligent guy, from what I've seen of him so far ;) And Riisto will probably be kicked out of Nokia's Chairman soon too.
  • Samsung might be worried about Microsoft and what it could do when it flexes its muscle. MS is the elephant in the room and Sammy will be feeling its presence soon.
  • I'm not sure Microsoft will want to antagonize a company with whom they have a healthy relationship and that is also keeping Apple tangled in legal disputes thus preventing the shareholders to wake up and realize what an imbecile Tim Cook is lol
  • No, they won't.  Microsoft is on a VERY short leash with the SEC here in the US.  Them getting sued over being a monopoly was pretty much a monthly occurance during the 1990s. There's a reason why it seems that Microsoft, Windows, and Windows Phone are in three different universes...that's because legally - they are.  They have to be.  All independent operating officers, all financed separately, and all organized indepently. The other dilemma you have with Microsoft is there are more than a few majority shareholders who want Microsoft to get out of the hardware business (sell off Surface, WP, and Xbox) and focus on enterprise applications only.  That's their bread and butter.  
  • Won't be MS, part of their deal is a 10 year license on all their patents with an option for perpetuity.
  • The perpetual use of patents never happens. And even if Microsoft asks, Nokia won't allow it. Because non-perpetual licenses allow more power to negotiate. Also, the licenses Nokia is granting Microsoft are NOT in an exclusivity regime, which means other OEMs can license the same patents at the same time.
  • Nokia won't allow it? Too bad, it's part of the deal they signed. The option belongs to MS, not Nokia.
  • Nop. It's a possibility that may be considered but it's still dependent on the will of both parties. Such kind of licensing is never offered which is why it's in the deal. The deal contemplates the possibility of Nokia licensing patents to Microsoft in perpetuity but both parties have to agree. In either case, it will never happen. Because perpetual licenses would demand Microsoft to keep paying for them even if they no longer used that patent. Neither Nokia would accept such a license nor would Microsoft ever ask for it.
  • You can say nope all you like. It's on MS' web-site under "Terms" in the deal. There is zero verbage concerning Nokia's agreement. If MS wants to continue after the ten years, Nokia has to let them.
  • It seems like you don't realize Microsoft didn't buy Nokia. They bought Nokia's handsets division. That means Nokia is still a legal entity. They still exist. And if they don't want to let Microsoft do anything with their patents portfolio after the ten-year agreement, they are in their legal right to say "no" and Microsoft will have to use a giant "OKAY" meme.
  • Anyway, MS can use for 10 year license to use Nokia brand on feature phones.
  • US Patents are only valid for 10 years, and then they have to be renewed by the patentholder.  Hence the 10 year cap.  
  • Patents in US are valid for 20 years from date of filing. There are annual support fees that vary by country, but for any patent deemed commercially valuable, those are generally paid without much thought. It used to be that US patents were valid for 17 years from issue date, but as part of the PCT (Patent Cooperation Treaty), the US changed from the owner of an invention being the first to conceive to being the first to file, like most of the rest of the world, but also extended the life of the patent by 3 years, to make up for this.
  • If anyone who use their patent without licensing should be sued. If they (Nokia) sued with reasonable fee, I don't think anyone have a problem with that.
  • Samesung shouldn't fear if Nokia turns in a patent troll cuz Samesung steals the patents from Apple.
  • fyi, nokia already took apple to court and won in 2011 for both SEP and non-SEP, Nokia is getting royalties of estimated $10 per iphone at the moment. the biggest take from this news is that Nokia's IPR business going forward was not impacted by Chinese restrictions...that means that the IPR thesis kicks in; significant is that the HTC (first of the android OEM) litigation/win and forced IP settlement validates JPM's IP thesis: JPMorgan: Theoretical calculations show that Nokia should receive 36 times more royalties from Samsung than it received in the previous deal (the prior settlement with Samsung is for SEP only, Nokia has not even gotten around to suing them as yet on the non-SEP) ...perhaps even more significant is that the Apple 2011 deal is coming up for renewal in 2016, JPM saying there could be a 20x increase for that alone...
  • From everything that has been relesed over the last several months, it doesn't look like Nokia will be used once Microsoft is the owner.  I don't know why Microsoft didn't fight hard to use the Brand name especially since Nokia has kept WP alive at this point.  Can you imagine if Nokia hadn't agreed to make WP? We would be dead and buried.
  • That was always a very weird decision, the non use of the Nokia brand. Though it might be connected to the fact that Nokia can return to mobile phones in 2016. In which case it would be weird to have two companies producing phones with the same brand while one of them (Microsoft) has absolutely no moral right to do so (as they aren't Nokia at all).
  • Who will Nokia make their phones if they're selling all the factories to Microsoft?
  • You do know that those factories aren't really theirs, right? What they are selling are the contracts they have with factories like Foxconn etc.
    As such, come 2016, Nokia can very easily get phones produced again: they just need to buy Jolla and make new factory contracts. It is also an opportunity for Nokia to get a scaled down D&S division and get rid of problematic factories like the Indian ones. Nokia can also, for example, ditch the US market and focus in Europe and Asia upon a comeback, which means the costs of maintaining a structure in a country that doesn't care about their products will be gone.
  • No you're wrong, Nokia's factories are theirs.  The huge new one in Hanoi just opened up recently and will virtually replace the entire capacity from the Indian plant and them some.  They also have factories built in China and Europe as well. Going forward, Nokia may well use OEM to build their devices.  They have done so in the past when theyve hit capacity constraints.
  • It bugs me to no end that a company is considered a patent troll for defending their own property. And I don't care if they bought or created the patent. Those who choose to steal someone's intellectual property should be sued and pay dearly.
  • What if a company wants a ridiculous fee/royalty? That's what trolls do. Some companies want give a fair price to use their patents. That's the problem. Motorola was one. They wanted a ridiculous fee from Microsoft for the xbox. It was struck down for being ridiculously high. Posted via the WPC App for Android!
  • That isnt trolling, that's just unrealistic damages my prior note on what a IP troll is...getting sick of ignorant people abusing the term as if it doesnt have a well defined meaning.  And no, Nokia is not a Troll nor can it ever be as it created its own IP.
  • I hope not but if they were they'd never admit it. I think the courts are about to put a end to this patent trolling anyway. Posted via the WPC App for Android!
  • It would require changes in patent laws. also, keep in mind patent laws aren't a global thing so courts or law changes in one country would only be relevant to that country
  • Hopefully the Indian factory fiasco gets settled soon. Even though it's kind of dirty, I kind of wish that Nokia would just announce that they're closing down the factory, then at the very last minute, Microsoft would come in and announce that they're covering the cost. It makes headlines, then boom, the Microsoft name instantly becomes associated with quality mobile phones (since they'll be buying a Nokia factory) and Microsoft gains tons of love from the Indian people.
  • The thing is the factory doesn't really belong to Nokia. But at any rate, yes, saving 8000 people from unemployment would definitely do well for Microsoft's reputation in India.
    It's just not gonna happen. Microsoft is certainly not stupid to go put themselves on the same Indian Governmental Guillotine. After the nightmares Nokia and other companies are having there, this is Microsoft's chance to get the hell out of there lol
  • India seems to repel companies away.
  • That might change once the government changes.
  • Well, MS Lumia, not a bad name I think.
  • Not at all...
  • Nice! Ms. Lumia.
  • They don't have plans to. Which sounds like they will be if they need to be.
  • Finally, a sensible article. Thank you.
  • What about S Korea/Sammy or ROC/HTC are the issues settled there?
  • Protecting and enforcing ALL contracted agreements in the use of patents that one owns, DOES NOT make that company a "patent troll". What a ridiculous and irresponsible use of that, so-called, title. Whether or not a company chooses to develop products using said patents is completely irrelevant and not the business of the patent licensees. A company is allowed to protect their assets.
  • Microsoft should just acquire what's left of Nokia in 5-10 years. And Nokia should do everything in their power to make sure Windows Phone rises even higher. It's not much of an acquisition without patents, etc.
  • I love Nokia! Posted via the WPC App for Android!
  • Then maybe post from your Nokia device.... Pfft love
  • It appears that a lot of people don't understand what patent trolls are. It's not developing new technology and charging people to use it. That's fair. The problem is when they acquire patents to technology that is already in production and then sue companies for not licensing it.
  • "Patent trolls are entities that enforce and collect royalties over patents they own." That's not accurate. Patent Trolls are those companies that buy patents or a stake in patents with the sole purpose of squeezing out money from companies that actually invest in R&D. These trolls exist in all fields, I've seen a few lawsuits at Internet companies I worked for in the past. Nokia spent billions on R&D, they can never be accused of being a patent troll just like Microsoft, who spends more than their competitors on R&D, can not be accused of being a patent troll (like some Android fans claim).
  • Someone has filed a patent for patent trolling anyway, so...
  • People should read this Before talk so many shit here.
  • Its not patent trolling with regards to Google.... Its payback bitch.... Pulling ms youtube app was not cool Google. Hope Bing gets traction with cortana's help and 8.1> puts android in its place (whitegoods & kids tablets)
  • Terrible. I cant imagine Lumia without "nokia"
  • Completely wrong definition of Patent Trolls. Enforcing and licensing your Patents makes you a Licensor exercising your rights AFTER disclosing all the details of your technology to the world instead of keeping it a secret.
    Patent Trolls are entities that falsely threaten outsized consequences for violating patents whose claims do not cover the actions of the business being threatened.
  • I'd disagree with that definition of a patent troll. I would define it as: - acquiring and filing questionable (general patent whose validity is in question) patents, for the single purpose of collecting royalties from said patents, especially from entities too small to engage in lengthy legal battles I find nothing wrong with creating something and patenting it, or seeing future value in a patent and purchasing it, and later licensing said patent, if the patent is actually defining something, and not a "A system which allows the user to see content on a screen" -type thing.