Apple paid Nokia $2 billion cash to settle its patent dispute

Nokia has disclosed that Apple made a $2 billion cash payment last quarter as part of the deal to settle patent disputes between the companies. Specific details of the settlement were previously not reported. Nokia has also revealed more information about how Apple and Nokia will work together going forward.

Back in May, Apple and Nokia announced that the two companies had reached a resolution to the dispute and would work together by expanding their relationship:

“We are pleased with this resolution of our dispute and we look forward to expanding our business relationship with Nokia,” said Jeff Williams, Apple’s chief operating officer.

In Nokia’s earnings call this week, the company disclosed the cash payment as well as more details about how Apple will work with Nokia:

Second, we got a substantial upfront cash payment of €1.7 billion from Apple, strengthening further our cash position. As said earlier, our plans is to provide more details on the intended use of cash in conjunction with our Q3 earnings.

Third, instead of a simple patent licensing agreement, we have agreed on a more extensive business collaboration with Apple, providing potential for a meaningful uplift in our IP Routing, Optical Networks and Digital Health business units over time. Hence, the value of the agreement will be reflected partly as patent licensing net sales in Nokia Technologies, and partly as net sales in other Nokia business groups.

Nokia first filed the lawsuit claiming Apple was infringing on its technology patents last December, which Apple initially responded to with a lawsuit of its own.

At the center of the dispute were 32 patents involving the iPhone 3GS and later (as well as other Apple products) which Apple claimed Nokia intentionally left out of a 2011 licensing agreement.

Following the settlement, Apple agreed to continue selling Nokia’s Withings products in its retail stores again as well.


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