Over the last two decades, Nokia has developed a large number of fundamental technologies and made significant contributions to the development of wireless communication standards. This research and development investment has resulted in a significant portfolio of standard essential patents (SEPs), which Nokia has agreed to license on fair, reasonable and non-discriminatory (FRAND) terms, in line with the intellectual property rights policies of the relevant standard setting organizations.
To date, in line with those undertakings, we have successfully agreed licenses with more than 60 companies, enabling them to benefit from our innovations to build products that work to the standards, fostering increased competition and more choice for consumers. From time to time, Nokia has shared information on the Nokia licensing program with competition or antitrust authorities in connection with specific cases or investigations. No authority has ever requested Nokia to change the way Nokia licenses its SEPs.
After the pending acquisition announced on September 3, 2013 of substantially all of Nokia’s Devices & Services business by Microsoft is closed, Nokia will retain its world-leading patent portfolio and Nokia’s previous FRAND undertakings remain in force. In addition to other customary closing conditions, the transaction with Microsoft is subject to regulatory approvals, a process which has involved thorough review of Nokia’s licensing practices by several competition authorities around the world. During that process, no authority has challenged Nokia’s compliance with its FRAND undertakings or requested that Nokia make changes to its licensing program or royalty terms.
In connection with this transaction with Microsoft, some of our competitors have suggested to regulators that after the transaction Nokia could try to abuse its position as a strong SEP holder. As we have no intention to do so and plan to continue to honor our FRAND undertakings in the future, we are prepared to voluntarily reaffirm Nokia’s continuing commitment to FRAND licensing principles.
Our statement below provides clarity on how Nokia will continue to license its SEPs. It does not reflect or introduce any changes to Nokia’s existing licensing program, royalty terms or practices. The statement has been provided to the Ministry of Commerce of the People’s Republic of China, in order to facilitate the approval process for Microsoft’s acquisition of substantially all of Nokia’s Devices & Services business. It applies equally to prospective licensees irrespective of their domicile.
- 1. Nokia confirms its continued commitment to honor its undertakings to standard-setting organizations (SSOs) to license its standard-essential patents (SEPs) on (fair), reasonable and non-discriminatory (FRAND) terms pursuant to IPR policies of such SSOs. This commitment prevents Nokia from imposing licensing terms for its SEPs that would be inconsistent with such FRAND undertakings.
- 2. Nokia confirms its support for a principle that, subject to reciprocity, injunctions with SEPs should not be enforced to prevent the implementation of a standard subject to FRAND undertakings, unless a patent holder has made a FRAND license available and the prospective licensee has been unwilling to enter into such FRAND license or to comply with its terms.
- 3. Subject to reciprocity and the evolution of SSO IPR policies and judicial interpretations thereof, Nokia acknowledges that the willingness of a party without undue delay to submit the resolution of a possible dispute whether license terms offered by Nokia are inconsistent with Nokia’s FRAND undertakings to an independent adjudicator that is reasonably acceptable to both parties, to be bound by such adjudication, to enter into FRAND license resulting from such adjudication, and to pay any potential award and FRAND royalties resulting from such adjudication and agreement, can be a relevant factor for an enforcing body to determine whether a party is a willing licensor or licensee.
- 4. Subject to reciprocity and Nokia’s FRAND undertakings to respective SSOs, Nokia makes its SEPs covered under such undertakings available for licensing pursuant to the IPR policies of such SSOs without subjecting the availability of such licenses to the licensees also taking licenses to Nokia’s patents not covered by such undertakings.
- 5. Whenever Nokia transfers SEPs to a new owner in the future, Nokia will pass on the FRAND undertakings with respect to such SEPs to such new owner by only assigning such SEPs subject to the existing FRAND undertakings given by Nokia to SSOs (including what is reconfirmed herein).
- 6. Nokia’s current practice of valuing each FRAND license in its full context takes into account, without limitation, the patents or portfolios licensed, the term, the products licensed, the business model for selling or distributing such products, the standards covered, the extent of market adoption of the standardized functionalities, the agreement structure, the value of any grant back license or any other non-monetary compensation, payment arrangements, and the field of use that are intended to be covered in each situation, as applicable. Following the closing of Microsoft transaction and subject to reciprocity, Nokia will not depart from its currently generally offered FRAND per unit running royalty rates for Nokia’s current portfolios of cellular communication SEPs, as and to the extent applicable, except where merited by differences in the above factors.
- 7. Only for the avoidance of doubt and without intention to allow circumvention of the commitments made herein, nothing in these commitments is intended to (a) have any impact on Nokia’s rights or obligations beyond the extent to which Nokia’s SEPs are covered by its existing FRAND undertakings, (b) limit Nokia’s legitimate right to license or divest any of its patents, (c) amend or cause amendment of any contract between Nokia and any third party, or (d) create any obligation for Nokia to take licenses to technologies that Nokia does not use.
- 8. Notwithstanding the foregoing, the commitment in paragraph 6 does not apply with respect to any company that asserts any patents against Nokia’s manufacture, sale or offering of mobile communication products or services.