South Korean smartphone maker LG has entered into a patent licensing agreement with Nokia Technologies. The two companies made the announcement on Tuesday, although it is unclear as to what Nokia patents LG will be using in its future devices. According to the agreement, LG will pay royalties to Nokia for using its mobile communications patents. It makes LG the first company to join the erstwhile Finnish smartphone maker’s mobile licensing program, since Nokia sold off its devices and services segment to Microsoft.
According to reports, Nokia has an approximate 30,000 patents, which relate to important mobile communications services like 4G, 3G and 2G. Over 60 companies are already licensed to use these patents.
Nokia’s patent portfolio is now more important than ever. Since the company is not selling smartphones any more, it will make most of its money through these patents, much like Motorola. Being one of the pioneers in mobile technology, Nokia has very important patents, which are integral to the making of a smartphone and how it connects to mobile networks.
Nokia’s exit from selling smartphones is in fact a cause for concern for other OEMs since it now stands in a position to assert its authority with the patents that it owns. As long as Nokia was making its own smartphones, it was bound by various laws, which could stop it from taking advantage of its vast and important patent portfolio. Such laws do not apply to the Finnish company anymore and it can actually take advantage of it if it wants to.
Joaquin Almunia, Competition Commissioner for the Euro Zone in 2013, had expressed concern over this earlier, saying he hoped Nokia wouldn’t behave like a patent troll or a patent assertion entity.