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.
Thanks for the tip @misangenius!
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By Jez Corden
- 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.
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.
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.
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.
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
Patent Trolls are entities that falsely threaten outsized consequences for violating patents whose claims do not cover the actions of the business being threatened.