Apple, Nokia Reach Patent-Licensing Agreement

Nokia and Apple have reached an agreement to end their long-running patent disputes, with Apple agreeing to pay Nokia a one-time fee plus royalties.

Nokia (NYSE:NOK) and Apple (NASDAQ:AAPL) have settled their long-running patent dispute. On top of agreeing to settle all litigation, both companies will withdraw complaints previously filed with the U.S. International Trade Commission.

Apple will pay Nokia a one-time fee, in addition to royalties. The actual amounts were not disclosed by Nokia in its June 14 press release, although the one-time payment will have a "positive financial impact" on the Finnish company's finances for the second quarter of 2011.

"We are very pleased to have Apple join the growing number of Nokia licensees," Stephen Elop, president and CEO of Nokia, wrote in a June 14 statement. "This settlement demonstrates Nokia's industry-leading patent portfolio and enables us to focus on further licensing opportunities in the mobile-communications market."

Nokia claims to have invested some $62 billion in research in development over the past decade, resulting in a massive patent portfolio.

Before their blanket settlement, Nokia and Apple had engaged in a long-winded and somewhat brutal legal battle. In March, Nokia filed a complaint against Apple with the U.S. International Trade Commission, accusing its rival of infringing on its mobile patents.

"Our latest ITC filing means we now have 46 Nokia patents in suits against Apple, many filed more than 10 years before Apple made its first iPhone," Paul Melin, Nokia's vice president of intellectual property, wrote in a statement accompanying that complaint. "Nokia is a leading innovator in technologies needed to build great mobile products, and Apple must stop building its products using Nokia's proprietary innovation."

Nokia's complaint centered on seven patents related to multitasking, data synchronization, positioning, use of Bluetooth and calling quality.

Nokia first began seeking patent royalties from Apple in May 2009. When Apple refused, the legal fun began in earnest. In a Delaware lawsuit filed in October 2009, Nokia claimed Apple infringed on 10 patents related to technology making devices compatible with wireless standards-to which Apple responded in December, with a countersuit claiming Nokia had violated 13 patents held by Cupertino.

"Other companies must compete with us by inventing their own technologies, not just by stealing ours," Bruce Sewell, Apple's general counsel and senior vice president, wrote in a statement accompanying that lawsuit.

Those legal battles, however, are just a small part of the larger conflict between the two companies for control of the smartphone market. Although Nokia continues to hold the lion's share of the global phone market, it finds itself increasingly besieged by Apple's iPhone and Google Android. Moreover, Nokia's plans to abandon its homegrown Symbian platform in favor of Microsoft's Windows Phone has led to a precipitous drop in sales of Symbian devices, devastating the company's stock and sparking negative comments by analysts. Nokia's Windows Phone devices aren't expected to hit the market before the end of 2011.