Post 6: Nokia's Patent War

I have a special feeling about Nokia since my first cell phone was Nokia’s. I would say I like it a lot since it is the most durable phone I have ever used. I have dropped it on floor more that five times in two years, but the phone still run well and only some slightly scars appeared on the surface of the phone. I just realized that Nokia’s phones disappear from the market gradually when professor Lavian mentioned in the lecture on Monday. Nokia used to be the world’s largest vendor of mobile phones from 1998 to 2012. However, as the growing use of smartphones, Nokia has suffered a declining market share in the past five years.

Then how can the company survive during these recent years? The answer is Nokia’s patent that not only shows Nokia’s value but also saves the company. One recent lawsuit is against Research In Motion (RIM) for infringing on some of its mobile WLAN patents. At the end, RIM agreed to a one-time sum of ~$65 million plus recur royalty payments of an undisclosed amount. The lawsuit not only proves the potential portfolio of Nokia’s patent, but also shows the growing efforts on Nokia’s part to get back to its smartphone business. Based on my research, Nokia holds about 16,000 issued patents and 4500 pending patent applications in and out of the U.S. With the current royalty run rate, Nokia’s patents are believed to be worth about $4 billion. Although Nokia is losing money on the smartphone business, it earns a steady income from its patents by suing RIM, Apple, HTC these recent years. It seems like Nokia has found a new way of using patents to generate profits, and it also demonstrates the strength of patent.

After reading all these, I do see the real power of patent. At the mean time, I am looking forward to see Nokia’s smartphone. Hopefully, Nokia won’t let me wait too long.