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Nokia and Honor ink patent cross-license agreement to boost 5G innovations

Nokia and Honor, a key player in the Chinese smartphone market, have signed a new patent cross-license agreement, covering both parties' fundamental inventions in 5G and other cellular technologies. It is the fourth major smartphone agreement that the Finnish firm has concluded in the past 12 months.

Wenyu Zhou, Head of Global Intellectual Property at Honor said, "As both 5G SEP holder and implementor, Honor highly respects IP rights and strongly believes that reasonable value of IP is important to the development of mobile industry. The conclusion of the patent cross-license agreement shows Honor's commitment on innovation to enabling a smart life across all scenarios and all channels, for all people."

Nokia's extensive patent portfolio, built on a substantial investment of over €140 billion in Research and Development since 2000, boasts around 20,000 patent families. Over 6,000 of these patent families are declared essential to 5G technology.

Commenting on this development, Susanna Martikainen, Chief Licensing Officer Mobile Devices at Nokia said, "We are delighted to have concluded an amicable patent cross-license agreement with Honor, one of the leading players in the Chinese smartphone market. It is the fourth major litigation-free smartphone agreement that Nokia has concluded over the past twelve months and highlights once again the strength of Nokia's patent portfolio and decades-long contributions to cellular standards and other technologies."


Nokia to miss full-year financial targets

Nokia revealed it no longer expects to meet its outlook for its financial full year 2023 as licensing renewal discussions continue to drag on, with a resolution not expected until some point in 2024.

The Finnish vendor, which is due to report its fourth quarter and full year financials on 25 January, stated a resolution will now benefit its financial performance in 2024, and it will factor in associated catch-up payments.

The company said the development combined with continued customer spending constraints in the quarter means it will not meet its 2023 targets in relation to net sales, comparable operating margin and free cash flow.

Patent rowsNokia noted while there had been intense negotiations between relevant parties and courts around the world, the company has opted to “prioritise protecting the value of its patent portfolio versus achieving certain timelines for resolution”.

It did not disclose which licensing agreements are currently outstanding or which parties they are negotiating with but notably it has been engaged in a long-running patent row with Oppo.

Around €140 billion has been invested in R&D for Nokia’s patent portfolio, which comprises of approximately 20,000 patents of which more than 5,500 are essential for 5G. Notably, it signed a long-term licensing agreement with Apple in July, as its existing agreement with the iPhone maker was due to expire.

Regarding its Q4 2023 performance to date, Nokia added net sales are expected to show a significant improvement sequentially. However, it did note the quarter had proved challenging due to ongoing customer spending constraints and “the recently communicated customer purchasing decision”.

The latter point refers to AT&T’s decision to hand Nokia rival Ericsson a $14 billion bumper open RAN contract.


 


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