Microsoft to pay €1.65 billion for Nokia patent licence
As part of the €5.44 billion deal announced today, Microsoft will pay €1.65 billion over 10 years for a non-exclusive licence to Nokia’s portfolio of 30,000 patents
The US software company is also paying Nokia €3.79 billion to acquire its devices and services business, comprising some 32,000 staff.
Microsoft is also acquiring: the Lumia and Asha brands; a licence to use the Nokia brand on current Nokia mobile phone products; and more than 8,500 design patents.
Under the complex deal, Nokia will assign to Microsoft its patent licence agreement with Qualcomm, as well as more than 60 other licensing agreements with companies such as IBM, Motorola Mobility and Motorola Solutions. The companies say: “These give Microsoft the benefit of attractive royalty arrangements Nokia negotiated.”
Microsoft already has licensing deals with companies such as Samsung, Apple, LG, Nortel and Kodak.
Microsoft can also choose to extend the 10-year non-exclusive licence in perpetuity.
The US company meanwhile will grant Nokia reciprocal rights to use Microsoft patents in its HERE services and Microsoft will become a strategic partner of the HERE mapping platform, paying Nokia a four-year licence.
Nokia will continue to exist independently as a telecoms equipment company. Its chief executive Stephen Elop will return to work for Microsoft, along with a number of senior executives.
The patent licensing deal covers all of Nokia’s patents and applications at the closing date, except for Nokia Networks. Microsoft says that the portfolio includes some 30,000 patents and is one of the two most valuable in wireless connectivity, alongside Qualcomm.
That means Microsoft is paying Nokia about €55,000 for each patent over the 10 years, or €5,500 a year.