Perhaps it's the spread of holiday cheer, but Research In Motion and Nokia have finally agreed to settle a dispute between the two smartphone competitors.
The agreement will result in settlement of all existing patent litigation between the companies and withdrawal of pending actions in the US, UK, and Canada related to a recent arbitration tribunal decision. Nokia says that financial structure of the agreement includes a one-time payment and on-going payments, all from RIM to Nokia, but that the specific terms of the agreement are confidential.
"We are very pleased to have resolved our patent licensing issues with RIM and reached this new agreement, while maintaining Nokia's ability to protect our unique product differentiation," said Paul Melin, chief intellectual property officer at Nokia. "This agreement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market."
Hannu Rauhala, an analyst at Pohjola Bank Oyj in Helsinki, estimates the one-time payment will be around $150 to $200 million, plus another $50 million per year for the next 10 to 15 years. Amortized over the full term, it's a relatively modest sum for RIM—though not insignificant—who has $2.9 billion in the bank.