Nokia has today been awarded additional licensing fee from Samsung by the International Court of Arbitration of the International Chamber of Commerce.
The court issued its award for the binding arbitration between Nokia and Samsung despite the two companies having 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.
Although Samsung is already paying Nokia for several patent agreements, the Finnish company wanted more money took the issue to regulatory commissions to be settled.
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.”
The decision is expected to have a favorable financial impact on Nokia Technologies’ earnings as the company reports net sales of approximately €400 million in the fourth quarter 2015 and approximately €1.020 million for the full year 2015.