LG has inked a patent licensing agreement with Nokia under which it will license mobile communication technologies from the Finnish company and in return pay royalties, it has been revealed.
The two companies have agreed to a royalty payment obligations which will be subject to commercial arbitration expected to conclude within a 1-2 year timeframe. Neither of the companies have revealed other details of the agreement.
LG is now one of the more than 60 licensees who have licensed Nokia’s 2G, 3G and 4G mobile communication technologies and is the first major smartphone manufacturer to join the licensing program since Nokia divested its Devices & Services business to Microsoft in 2014.
“We are pleased to welcome LG Electronics to our licensing program,” said Ramzi Haidamus, President of Nokia Technologies.
“We’ve worked constructively with LG Electronics and agreed a mutually beneficial approach, including the use of independent arbitration to resolve any differences. This agreement sets the scene for further collaboration between our companies in future.”
An important deal for Nokia
With Nokia out of the mobile market with disinvestment of its devices and services business, patents have become increasingly important for the Finnish giant. Nokia has also decided to sell-off its mapping unit and that makes the patents division all the more important as it will only be left with R&D and networking arm.
Nokia has inked a similar deal with Samsung. Back in 2013, Samsung signed a five-year extension of its patent agreement with Nokia, which is also based on arbitration to finalise the royalty rate.
According to Nokia its patent arm saw a revenue increase of 103 percent year on year and with Samsung’s arbitration to conclude this year, the revenue is set to increase further.