Apple Begins Paying $2 Billion in Cash to Nokia as Part of Lawsuit Settlement
Nokia disclosed its financial results for the second quarter of 2017 this week, and within the results the company mentioned that it received an "up-front cash payment" of approximately €1.7 billion ($2 billion), part of which was said to be recognized during the Q2 2017 results. Nokiamob then reached out to Nokia, and the company confirmed that the cash payment came from Apple.
The payment is part of a settlement agreement reached between Apple and Nokia in May of this year, regarding a lawsuit began by Nokia in December 2016. In the original lawsuit, Nokia sued Apple in the United States and multiple other countries, with a complaint that stemmed from a disagreement between the two companies over licensing fees for Nokia technology.
The legal battle continued to escalate as Apple responded with its own antitrust lawsuit against Nokia. In Apple's claims, the company said that Nokia was transferring patents to patent holding entities in a bid to gain additional royalties from Apple, violating FRAND (Fair, Reasonable, and Non-Discriminatory) deals Apple had established with Nokia.
In the settlement news this past May, the companies agreed to a multi-year patent license deal, where Nokia would provide "certain network infrastructure products and services" to Apple, and Apple would then return all Nokia-owned health products to Apple retail and online stores.
In regards to the $2 billion payment from Apple, Nokia said it would disclose its plans for the money in its Q3 earnings later this year.
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.
Nokia Technologies led the way, with sales up 90% versus the same period last year. That was largely, but not completely, driven by our recently-announced agreement with Apple; and you can also see the impact of that agreement in our cash position.
So far, Apple has only partially paid the $2 billion cash sum to Nokia, so besides finishing that payment, Apple will also continue to pay royalties to the company during the term of the agreement.