Last month, a leadership change at Nokia Technologies became known (October 18, 2024 ip fray article). Nokia Technologies invests in research and development in several key areas, is one of the world’s leading licensors of standard-essential patents (SEPs) and holds many relevant implementation patents as well. ip fray requested an interview with the company’s (Acting) President, Patrik Hammarén, to discuss where Nokia Technologies and the industry at large are headed. After following Mr. Hammarén’s impressive achievements from a distance for quite some time, this was the first opportunity we have had to speak. He understands all aspects of the IP virtuous cycle and has been heavily involved in many of Nokia’s major smartphone renewals as well as accelerating their IoT licensing activities.
ip fray: Thank you for having agreed to this interview. Let us start with a little bit of information about your background and different roles within Nokia from legal counsel to Group Leadership Team and Acting President of Nokia Technologies.
Mr. Hammarén: I started at Nokia 18 years ago in the field of open source. That was how I became truly involved in intellectual property. Some people would consider it the other side of the table of the patent licensing we discuss today. From there I went to the handset division in Central Europe and lived abroad for a couple of years. I joined the mapping technology unit that later became known as HERE. Ten years ago, when Nokia’s licensing business was established, I moved into the patent licensing business. It’s an exciting business to be in.
ip fray: What would you consider your career highlights in IP?
Mr. Hammarén: Most recently, the acceleration of our IoT licensing activities. IoT is a fragmented market, so it was a real challenge. To overcome this, we simplified our go-to-market approach. Vertical by vertical, simply by ensuring everyone in a vertical has a license before moving to the next vertical. This has enabled us to achieve several industry firsts. For example, the first 5G agreement with a Chinese automotive company; agreements with every major Western point-of-sale payment terminal maker; and the first deal with a Chinese point-of-sale payment terminal maker. I’m very proud of the collaboration of the Nokia teams behind those deals, but the biggest achievements by far, simply due to the complexity of the projects and the teamwork behind the outcomes, are our agreements with Chinese handset makers, both the original deals and the renewals.
ip fray: Those are some fairly recent successes. What would you mention from the previous period?
Mr. Hammarén: Well, one of the probably lesser-known success stories is that we licensed many Indian handset makers seven, eight years ago, at a time when they had large volumes and when others found it difficult to do business with them.
ip fray: Would it be fair to say that you achieved some firsts in India and later in China (September 23, 2024 ip fray article), while others were struggling to get traction?
Mr. Hammarén: That’s a fair statement. It took a lot of work and problem solving by the team but we found a way. And that’s the key to the patent licensing business. Hard work, focus, relationship building, and persistence usually always pays back over time.
ip fray: How do you then make those deals happen, especially in such difficult circumstances where you could not just follow a trodden path? When you strike deals and when you enter new markets, be it new fields of use or new geographies, what is generally your approach to this?
Mr. Hammarén: With any deals, you really need to understand your counterparts and try to find common ground with them. That means understanding their business, their goals, their needs and their pain points and the environment within which they are operating. You have to take all of this into account. This was why I moved from Finland to Hong Kong for several years so that I could learn more about Chinese business culture and spend more time speaking to our counterparts. It was a wonderful experience and of course China is such an important market for our business, so it was really worthwhile.
Now, when we talk about IoT and the new verticals where nobody has really been active, we’re trying to ensure that companies understand that everybody in a given vertical is going to end up paying license fees to Nokia. We want to make sure that all companies are treated fairly and equally, and that they all play by the same rules. That everyone knows they can’t avoid taking a license by just holding out. It’s the fair thing to do.
ip fray: You avoid market distortions that way, and there should be no so-called intelligent infringement.
Mr. Hammarén: Exactly.
ip fray: Now that you are the Acting President of Nokia Technologies, what are your first impressions on this job?
Mr. Hammarén: I am very fortunate to take on the role when the business is in such a strong position and Jenni deserves a lot of credit for that. We’ve successfully completed our smartphone renewals and have real momentum in growth areas. Looking ahead, we have lots of opportunities open to us and a super strong team to take the business forward. So, a bright future ahead of us. I’m also very conscious of the fact that Nokia Technologies accounts for a large part of the Nokia Group’s profits. It is a major responsibility for me and our leadership team and we’ll continue to look for ways to maximize shareholder returns because the revenues we generate and the investments we make are not the company’s money. It is our shareholders money. We need to meet investor expectations and also ensure they understand how our business works.
ip fray: And what are your early priorities in this new role?
Mr. Hammarén: We’re approaching the end of the year, so, as any business, we want to reach our annual targets. It’s also key to make the right decisions on where to invest, such as in what technologies, and to identify the right investment levels for the opportunities we have. And to continue to protect our innovation by securing patents for our technology in jurisdictions around the world.
ip fray: How would you describe your approach to leadership?
Mr. Hammarén: My perspective on team building comes from the world of sports. I used to do a lot of sports, especially in my youth. There are many similarities between how sports teams and companies operate. You have to have a high-performance culture where everyone has the opportunity to perform at their best. And in order to achieve the best results, you need different types of people and that will also mean divergent opinions. People need to feel psychologically secure, knowing that they can communicate openly and collaborate effectively with their colleagues. A healthy culture also means we can challenge each other’s thinking when we think something should be improved, and also give positive feedback when it is deserved. Always challenging ourselves to learn from our experiences, doing things even better next time.
And of course, leadership is about setting a clear direction. Choosing where we invest time and money. Which licensing verticals to target, what technologies to invest in. There are so many opportunities open to us. We have to say “no” to many as well. The key is to focus and play to win.
ip fray: How do you go about building a team, about choosing people?
Mr. Hammarén: Here I would also use a sports analogy. People have different core skills and in order to build an effective team, you need to have a diverse blend of people with different skills and backgrounds who complement each other. For the team to function, everyone must however have a “team first” mindset.
ip fray: How would you describe the culture you find in Nokia Technologies and is there anything you might want to change or, say, adjust?
Mr. Hammarén: I wouldn’t have been working for Nokia for such a long period of time if I didn’t truly enjoy it. I think the culture at Nokia is phenomenal, it’s a special place to work and a number of people who left the company later have confirmed the same to me. Our three core values – we call them essentials – are being open, fearless and empowered. I want our teams to live these essentials every day. To be open to new ideas and different points of view, different ways of doing things. To innovate and be prepared to take risks, and to be empowered to execute our strategy.
ip fray: Who are the people you would say inspired you or whom you admire?
Mr. Hammarén: Warren Buffett because he has a very healthy and common-sense approach to many of the world’s problems. And he only operates in areas where he understands what he’s doing and he doesn’t mind not participating in games he doesn’t understand. That’s a good philosophy for us, too. Again, the key is focus, say no and play to win.
ip fray: You previously indicated that in your observation, the business is in very good shape. What more can you say to describe Nokia Technologies’ current position and future prospects?
Mr. Hammarén: As for our current position, I think the facts speak for themselves. The growth areas we have been focusing on are starting to make a contribution to the bottom line. The main challenge for us is to decide which opportunities to focus on, but that is a positive problem to have. And our inventors continue to do great work shaping 5G Advanced and 6G and next generation multimedia technologies. So we feel very positive about the pipeline going forward. And our patent team ensures that the quality of our assets remains at a high level. So overall there is a very healthy mix and we have a strong position to build from.
ip fray: What technology areas are you investing in now?
Mr. Hammarén: Our primary one is, of course, in cellular: 5G and 6G. Then there is also Wi-Fi and multimedia. The standard-essential patents in these fields require our biggest investment.
ip fray: How do you view the impact of AI on Nokia’s R&D efforts and generally on the world of standards?
Mr. Hammarén: In the coming years we are going to see a very large impact of AI in most of the areas in which we operate. For example, in cellular, we’ll see networks that can sense, think and act. Enabling people, machines and devices to interact in real time like never before. And we are exploring how AI and neural networks can improve video compression technology by tuning the video codecs. And then in terms of patenting, we already see quite a bit of impact from AI on our day-to-day activities. AI can help improve quality and reduce costs. We are seeing some initial effects already, but I certainly expect AI to have an even larger impact going forward.
ip fray: What is your approach to patenting?
Mr. Hammarén: I spoke about high-performance earlier, the patenting team are a great example of this. The team filed over 2,300 patents on new inventions last year. And over past ten years the team have filed over 60,000 patents. Incredible work. But it’s not just about the quantity of patents, quality is also incredibly important. There has been a transformation from what used to be a support function to what is now an independent business. Our head of patenting, Sami Saru, always says we should “focus on patenting that matters”. So, we now file patents in a way that allows us to monetize those assets in the future. That means ensuring we have patents in the right countries and the right fields with the right level of investment in each case.
ip fray: IP licensing is inherently a high-margin business, but there are costs involved, mostly R&D and sometimes also litigation. How do you decide how much to invest in a given field?
Mr. Hammarén: We’re always trying to achieve the right mix of investment in the various areas to deliver compelling returns, and we set priorities on that basis. And we also try to make sure that we’re a fair licensor. That sometimes requires us to spend money on litigation so companies do not benefit from not taking licenses. We want to contribute to a level playing field.
ip fray: Anything you’d like to add?
Mr. Hammarén: I enjoy reading your articles. You provide a lot of thoughtful analysis. And with respect to Nokia Technologies, I see some really good opportunities ahead of us and a team that can deliver. We’re in a strong position today, but you have not seen the best from us yet.