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NOKIA & XIAOMI: Sign Landmark Patent Licensing Agreement

Nokia Xiomi Agreement

The first week of July 2017 comes up with a paradigm in patent licensing when two global cellular technology leaders, Telecoms network equipment maker Nokia and Chinese smartphone maker Xiaomi announced business collaboration and a multi-year patent agreement, including a cross-license to each company’s cellular standard-essential patents.

Xiaomi which is one of the world’s leading smartphone manufacturers has also acquired patent assets from Nokia as part of the transaction, a step to expand its footprint across the world to become a global brand.

The Agreement:

Under the agreement, the Finnish Company Nokia will provide network infrastructure equipment designed to deliver the high capacity, low power requirements expected by large web providers and data centre operators. Nokia and Xiaomi will work together on optical transport solutions for data centre interconnect, IP Routing based on Nokia’s newly announced FP4 network processor, and a data centre fabric solution. In addition, the companies have agreed to explore opportunities for further cooperation, in areas such as Internet of Things, Augmented and virtual reality, and artificial intelligence.

Other such deals by Nokia

Nokia has patent license deals with leading handset makers Apple Inc. and Samsung Electronics Co. Ltd, but the agreement with Xiaomi is the Finnish company’s first with a Chinese phone maker. These back to back patent license agreements of Nokia with other Global Cellular technology companies is creating a ladder for the Nokia Technologies to be a leader in technology development and licensing. After investing more than EUR 50 billion in R&D over the last two decades, the approximately 30,000 individual patents and patent applications that cover innovations including many enabling technologies used in virtually all mobile devices used today, Nokia is expanding its patent licensing business.

Maybe this patent agreement with Xiaomi, not so substantial for Nokia in financial aspects but it will open a door to start to negotiations with other big names in cellular manufacturers of China. Nokia built up its catalogue of patents in the days when the company dominated the mobile handset business.  Patent royalties represent a silver of Nokia’s overall revenue, more than 90% of which comes from telecoms network equipment.

Benefits of a sound Patent Strategy

This patent licensing deal with Nokia for its patented innovations with Xiaomi reflects the benefit of reaping a seed earlier and that seed was their innovations with the necessary IP protection. These patent agreements or patent collaborations between technology leader companies through successful patent licensing program makes a win-win situation for both the companies and creating a good hope for other companies, organizations and IP actives to get benefit from patented inventions and this will too boost up the breakthrough innovation in key Programmable World technologies with their patent protection.

United IPR

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