Apple pays up for disputed Nokia patents

After an eighteen-month battle, Apple’s finally caved in and agreed to pay Nokia license fees covering two wireless phone patents.

Apple will hand over an undiscosed one-off fee, as well as paying on-going royalties from now on. Both companies will withdraw their earlier complaints to the US International Trade Commission, which had been due for a decision later this month.

“We are very pleased to have Apple join the growing number of Nokia licensees,” says Stephen Elop, president and chief executive officer of Nokia.

“This settlement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.”

The case has been dragging on since October 2009, when Nokia sued Apple over ten patents relating to wireless data, speech coding, security and encryption, and demanded that royalties be paid on iPhone sales since 2007.

Apple promptly countersued, saying Nokia was infringing 13 of its own iPhone patents.

But while Nokia may be the obvious winner, says patent expert Florian Mueller, the settlement will benefit Apple too – particularly with regard to its competitors.

“Having proven its ability to defeat Apple – after the most bitterly contest patent dispute that this industry has seen to date – is a clear proof of concept. Other companies whom Nokia will ask to pay royalties will have to think very hard whether to pay or pick a fight,” he says.

“This is also very significant with a view to Android. Given that Android is in many ways a rip-off of Apple’s operating software, Android-based devices are highly likely to infringe on largely the same Nokia patents that Apple now felt forced to pay for.”