Context: Over the past thirteen months Nokia announced six major smartphone patent license renewals, most recently on Monday the settlement with vivo (January 5, 2024 ip fray article) and previously with OPPO (including OnePlus and realme), Apple, Samsung, Huawei and Honor. Earlier this week Nokia indicated the renewal cycle was drawing to a close.
What’s new: Now Nokia has announced “ha[ving] signed its last major smartphone agreement that remained under negotiation.” The licensee is not named and merely described as “a company whose license expired earlier.”
Direct impact: Nokia Technologies, the division that manages Nokia’s IP, can now focus on growth opportunities in other fields of technology. Should there be any smaller unwilling licensees, they may get more attention now than before (and more than they want). It appears most plausible that today’s unnamed licensee is Xiaomi, for the reasons stated further below.
Wider ramifications: The European Union’s legislative institutions and its executive branch, the European Commission, should take note of the fact that standard-essential patent (SEP) licensing solutions continue to be worked out without the need for more EU bureaucracy. Cellular and other SEPs are sometimes enforced, and there can occasionally also be larger multijurisdictional disputes. There is more than merely room for improvement, but no urgent need for ill-conceived intervention. Also, the fact that only one of all those implementers doesn’t want to be named shows to policy makers that confidentiality issues can’t just be blamed on licensors.
It is a myth that it’s always or mostly the net licensors that don’t want to be “transparent” about their license deals. The “transparency” argument is overused (January 29, 2024 ip fray article). With Nokia having announced the names of all those major licensees and only today’s announcement not doing so, it’s effectively “transparent” that the licensees must have insisted on confidentiality. There may very well be valid reasons for that. The point is just that confidentiality requests come from both sides of the SEP negotiating table.
One particularly funny case of a major SEP licensee who insisted on confidentiality even beyond the point of total obviousness was Tesla. Just when they filed a UK lawsuit against InterDigital and Avanci, they went on record about their Avanci 4G license (January 4, 2024 ip fray article). Until then, everyone could figure as there was no plausible explanation (unless one believes that aliens were involved) for the virtually simultaneous withdrawal of patent infringement actions brought by Avanci licensors against Tesla. And just like with today’s announcement, there may have been valid reasons for that preference.
Is Xiaomi to Nokia’s just-concluded renewal cycle what Tesla was to Avanci 4G?
It’s not as clear as in Tesla’s case with the withdrawal of various lawsuits. But there are strong reasons. The simplest way to put it is: who else?
Xiaomi is the only major smartphone maker with whom Nokia hasn’t recently announced a renewal. There was the half-dozen of renewals over the past 13 months. The mere fact that Xiaomi wasn’t among them makes it high likelihood. They’re like the most obvious missing name.
The only other name that would come to mind is Lenovo with its Motorola Mobility smartphones, but they reached as settlement with Nokia in April 2021 (press release) that, in the words of Nokia Technologies president Jenni Lukander, “reflects Nokia’s decades-long investments in R&D and contributions to cellular [emphasis added] and multimedia standards.” It’s hard to imagine that an agreement signed in April 2021 has already expired.
Then there’s HMD, but Nokia is a shareholder of that company, which makes smartphones under Nokia’s old brand. It would be extremely strange if a Nokia-HMD agreement had expired. Maybe the shareholder agreement takes care of this anyway. Still, it can’t be ruled out 100%. But why would the situation with Xiaomi be unclear then?
Nokia signed a license agreement with Xiaomi in 2017. That information is public: Mrs. Lukander had the name in a timeline chart at Nokia’s 2021 Capital Markets Day. Assuming the 2017 agreement was a seven-year deal, it would have expired. And that would be a very typical term for that kind of license deal, especially also for Nokia.
In terms of seasonality, Saturday will be Chinese New Year’s Day. That, too, suggests they got the deal done just before people would go on a short vacation in China. Nokia’s most recent agreements prior to this ones were also made with Chinese companies.
Not long after Xiaomi presented a truly impressive electric vehicle, the company may have “pulled a Tesla” in terms of not being named as a SEP licensee.