Nokia And HTC End Patent Disputes, Enter Into Agreement To Collaborate On Access To Patented Technology

Nokia Corp. (NYSE:NOK) and HTC Corp. (TPE:2498) have finally settled all patent disputes and have entered into a collaboration agreement to provide access to each other’s patented technology to explore future projects. Though the financial details of the settlement are not revealed yet, the companies said in a statement that HTC will pay royalties to Nokia.

The U.S. International Trade Commission was set to announce Monday whether HTC’s devices would face an import ban.

"We are very pleased to have reached a settlement and collaboration agreement with HTC, which is a long-standing licensee for Nokia's standards essential patents. This agreement validates Nokia's implementation patents and enables us to focus on further licensing opportunities," said Paul Melin, chief intellectual property officer at Nokia in a statement.

In the changing scenario of the mobile phone market, both Nokia and HTC have been facing tough competition and have lost their lead positions over the years. Nokia, with its launch of the Lumia series, tried to win back its position by entering into the smartphone segment with a bang, but its success has not matched Apple’s (NASDAQ:AAPL) iPhone and Samsung’s (KRX:005930) wide range in the category. HTC is currently pinning its hopes on an updated version of HTC One.

“The pact reduces one uncertainty for HTC,” Fu-li Chen, an analyst at Jih Sun Securities in Taipei, told Bloomberg Businessweek. “The deal was expected and may not have a big impact on HTC’s finances.”

HTC, whose sales dropped 30 percent last year, informed the Taiwan Stock Exchange that the pact will not have any adverse impact on its finances. Grace Lei, HTC’s general counsel, said in a release Friday, "Nokia has one of the most pre-eminent patent portfolios in the industry. As an industry pioneer in smartphones with a strong patent portfolio, HTC is pleased to come to this agreement, which will enable us to stay focused on innovation for consumers."

Nokia, which announced the sale of its mobile phone business to Microsoft (NASDAQ:MSFT) recently, retained its patents on the fundamental phone technology in hope to recoup the billions it spent on research. The company has decided to focus more on networking equipment than staying in the mobile phone business. The $7.3 billion Microsoft-Nokia deal is expected to be closed this quarter.