Samsung will pay Nokia some additional Licensing Fee after the decision in a patent license arbitration with Samsung has favored Nokia Technologies. In fact this arbitration was awaited for sometime now by investors and it will have positive Financial impact to the tune of around 220-230 million EUR for Nokia annually. Nokia also expects to receive at least approximately EUR 1.3 billion of cash during years 2016 – 2018 related to its settled and ongoing arbitration in Nokia Technologies, including this. Samsung has already been paying a certain Licensing Fee to Nokia and this arbitration brings some more cash to Nokia from Samsung.
Here is the press release,
Nokia receives decision in patent license arbitration with Samsung – positive financial impact for Nokia Technologies
Espoo, Finland – The International Court of Arbitration of the International Chamber of Commerce has issued its award for the binding arbitration between Nokia and Samsung. Nokia and Samsung had previously agreed that this would settle the amount of additional compensation payable to Nokia for the five year extension of their license agreement covering certain Nokia patents for the period beginning on January 1, 2014.
This award covers part of the Nokia Technologies patent portfolio until the end of 2018. Nokia will continue to discuss with Samsung its other relevant intellectual property portfolios. Nokia has strong intellectual property assets consisting of intellectual property rights in the separate Nokia Technologies, Nokia Networks and Alcatel-Lucent portfolios, which include patents essential for a variety of standardized technologies as well as relevant implementation patents and proprietary technologies.
Including this award, Nokia expects Nokia Technologies to report net sales of approximately EUR 400 million in the fourth quarter 2015 and approximately EUR 1 020 million for the full year 2015. These numbers include catch up revenue because the award exceeded revenue estimates already recognized with respect to the period from January 1, 2014 through September 30, 2015. Consistent with Nokia’s outlook, Nokia Technologies net sales for the full year 2015 are expected to increase year on year, even after excluding amounts related to the award. Following the award, as of the end of the fourth quarter 2015, the annualized net sales run rate for Nokia Technologies was approximately EUR 800 million.
Nokia expects to receive at least approximately EUR 1.3 billion of cash during years 2016 – 2018 related to its settled and ongoing arbitrations in Nokia Technologies, including this award. Nokia has also earlier received some related prepayments.
“The use of independent arbitration to resolve differences in patent cases is a recognized best practice, and we welcome the additional compensation payable to Nokia under the extended agreement,” said Ramzi Haidamus, President of Nokia Technologies. “We look forward to further collaboration with Samsung and others in additional licensing opportunities in the mobile communications market and beyond.”