NOK Nokia Corp

By Dominic Chopping 

Nokia Corp. expects to gain more than a billion dollars in cash from its intellectual-property portfolio in the next three years, including the proceeds from a patent pact with Samsung Electronics Co. signed more than two years ago.

The Finnish telecom-equipment maker said on Monday that an arbitration panel has ruled on how much the South Korean company has to pay as part of their 2013 licensing agreement, but didn't disclose the sum itself.

Nokia said that it expects to receive at least EUR1.3 billion ($1.4 billion) in cash between 2016 and 2018 related to settled and continuing arbitration regarding its intellectual property, including the Samsung award.

"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 Nokia Technologies President Ramzi Haidamus.

The Finnish and South Korean companies agreed in November 2013 to a new licensing agreement, extending a previous deal through 2018 that allows them to use each other's patents, thereby lessening the likelihood of lawsuits and related costs.

Nokia, which agreed to sell its mobile handset business to Microsoft Corp. in 2013, was set to receive more compensation from the South Korean company than it received from the previous deal, but the companies agreed that the exact sum would be decided by arbitration.

The deal follows the resolution of a patent dispute between Ericsson AB and Apple Inc. which reached an out-of-court settlement in December. Apple agree to pay an undisclosed amount plus continuing royalties over seven years to use some of the Swedish company's patents.

Relationships in the telecommunications sector are complex, where standardization of technologies and increased penetration of smartphones rely on sharing research and development globally. But sharing such standards has led to complaints and legal proceedings between network manufacturers and smartphone makers over the fair use of some technologies. Samsung and Microsoft agreed to end a contract dispute a year ago.

Nokia has put its investment in research and development between 1984 and 2014 at more than EUR50 billion, with Nokia Technologies managing a portfolio of 30,000 individual patents and patent applications.

Nokia Technologies should report net revenue of around EUR400 million in the fourth quarter of last year and EUR1.02 billion for the full year, Nokia said on Monday.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

February 01, 2016 03:51 ET (08:51 GMT)

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