RIM’s Upfront Payment To Nokia In Patent Dispute Settlement Totals $65M
RIM responded to Nokia's request to have its devices removed from sale following a patent decision in the Finnish company's favor by working out a settlement, and now we're beginning to get a sense of the specific terms of said arrangement. AllThingsD has uncovered an SEC filing that details RIM's first lump-sum payments, which amounts to €50 million (or around $65 million). Following that initial exchange, RIM will have to make royalty payments on the sale of each device.
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RIM responded to Nokia’s request to have its devices removed from sale following a patent decision in the Finnish company’s favor by working out a settlement, and now we’re beginning to get a sense of the specific terms of said arrangement. AllThingsD has uncovered an SEC filing that details RIM’s first lump-sum payments, which amounts to €50 million (or around $65 million). Following that initial exchange, RIM will have to make royalty payments on the sale of each device.

Nokia and RIM announced their new patent license agreement on December 21, sharing only that it would settle all patent litigation between the two telecommunications companies, and that it would include both a one-time payment (the $65 million alluded to in the new SEC documents) and ongoing payments from RIM to Nokia. Specific details were said to be confidential at the time, though Jeffries analyst Peter Misek told AllThingsD in the weeks leading up to the eventual settlement that the royalty rate RIM was likely to pay was somewhere in the $2 to $5 range per handset sold.

If those numbers are accurate, RIM could come close to essentially paying out roughly the same as the $65 million lump sum per year to Nokia in royalty fees. That may seem steep, especially for a beleaguered company like RIM, but it is actually in line with the payment structure Nokia has extracted from companies who settled past patent litigation with broad licensing agreements, including Apple.


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