Nokia's 2008 US SEC 20-F and InterDigital (and other IPR matters)
>> Nokia has Filed Form 20-F for 2008 With the US Securities and Exchange Commission
Nokia PR
Espoo, Finland
March 5, 2009
Nokia (NYSE: NOK) has today filed its annual report reconciling its IFRS financials to GAAP in USD on Form 20-F for 2008 with the US Securities and Exchange Commission. The report is available in pdf-format at
http://www.nokia.com/financials
Shareholders may request a hard copy of the report free of charge through Nokia's Internet pages. ###
Edgar has it (copy unlocked) in their database in htm format as well ...
http://www.sec.gov/Archives/edgar/data/924613/000115697309000127/u06062e20vf.htm
Nokia filed last year on the same date (i.e. March 5).
Nokia Annual Accounts 2008 with its audited financials in Euros has not yet published.
These are the portions of Nokia's 20-F that are concerned with IPR negotiation and/or litigation and InterDigital ...
>> 8A7. Litigation (Page 127)
>> Intellectual Property Rights Litigation
InterDigital
In 1999, we entered into a license agreement with InterDigital Technology Corporation and Interdigital Communications Corporation (together “IDT”) for certain technology. The license provided for a fixed royalty payment through 2001 and most favored licensee treatment from 2002 through 2006.
In April 2006, Nokia and IDT resolved their contract dispute over the patent license terms originally agreed to in 1999 and the impact on Nokia of IDT’s licenses with Ericsson and Sony-Ericsson. The agreed settlement terms resolved the legal disputes related to 2G products, with Nokia obtaining a fully paid-up, perpetual, irrevocable, worldwide license to all of IDT’s current patent portfolio, and any patents IDT may later acquire, for purposes of making or selling 2G products, including handsets and infrastructure. The settlement terms also resolved disputes related to all our products up to the agreement date. The IDT settlement terms did not address any prospective 3G license terms; however, our sale of 3G products was fully released through the date of the settlement agreements.
Nokia and IDT currently have pending legal disputes in the United States regarding IDT’s alleged 3G patents. In August 2007, IDT filed a complaint against us in the US International Trade Commission (“ITC”) alleging infringement of two declared essential WCDMA patents. In October 2007, the ITC announced that it was consolidating the IDT action against us with an action IDT had brought against Samsung. IDT then amended the complaint to add two additional declared essential WCDMA patents. The consolidated action includes four patents, also asserted against us in Delaware. Through its ITC action, IDT is seeking to exclude certain of our WCDMA handsets from importation and sale in the US. In this situation, IDT has committed itself to grant a license on fair, reasonable, and nondiscriminatory terms with regard to the patents in suit.
Nokia also filed a motion in the Southern District of New York court on February 13, 2008 to prevent IDT from proceeding with its claim in the ITC because we believe the patents at issue are also licensed to us as part of an R&D agreement signed in 1999. Nokia’s motion was granted by the district court on March 20, 2008, and the ITC case against Nokia was deconsolidated from the Samsung case and stayed pending IDT’s appeal of the district court’s decision. After the injunction was entered by the New York Southern District Court, Nokia initiated an arbitration proceeding on April 1, 2008 to determine its rights under the 1999 R&D Agreement. On appeal, the Second Circuit reversed the injunction entered by the New York Southern District Court on July 31, 2008 and remanded the case to that court for further proceedings. Nokia has requested a status conference before the New York Southern District Court to determine how the case should proceed. Nokia’s arbitration is stayed pending a decision by the New York Southern District Court on further proceedings.
Following the Second Circuit’s decision reversing the injunction, a hearing on the merits of the ITC case was scheduled to begin on May 26, 2009 with an initial determination currently scheduled for August 14, 2009 and a final determination currently scheduled for December 14, 2009. ... <Big Snip> ...
Notes to the Consolidated Financial Statements (ŠF)
1. Accounting principles ... <snip> ...
Provisions (Page F-18)
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, the reimbursement is recognized as an asset only when the reimbursement is virtually certain. At each balance sheet date, the Group assesses the adequacy of its preexisting provisions and adjusts the amounts as necessary based on actual experience and changes in future estimates.
Warranty provisions: The Group provides for the estimated liability to repair or replace products under warranty at the time revenue is recognized. The provision is an estimate calculated based on historical experience of the level of repairs and replacements.
Intellectual property rights (IPR) provisions: The Group provides for the estimated future settlements related to asserted and unasserted IPR infringements based on the probable outcome of potential infringement.
Tax provisions: The Group recognizes a provision for tax contingencies based upon the estimated future settlement amount at each balance sheet date.
Restructuring provisions: The Group provides for the estimated cost to restructure when a detailed formal plan of restructuring has been completed and the restructuring plan has been announced.
Other provisions: The Group recognizes the estimated liability for non-cancellable purchase commitments for inventory in excess of forecasted requirements at each balance sheet date. ... <snip> ...
Legal contingencies (Page F-21)
Legal proceedings covering a wide range of matters are pending or threatened in various jurisdictions against the Group. Provisions are recorded for pending litigation when it is determined that an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Due to the inherent uncertain nature of litigation, the ultimate outcome or actual cost of settlement may materially vary from estimates.
27. 2009 Provisions in million Euros¹ (Page F-64)
IPR
At January 01, 2008: Warranty Restructuring Infringements Tax Other Total
======== ============= ============= ===== ======= =======
Euro¹ €1,489m €617m €545m €452m €614m €3,717m
US Dollars² $2,189m $907m $801m $665m $903m $5,465m
·
At Decembr 31, 2008: Warranty Restructuring Infringements Tax Other Total
======== ============= ============= ===== ======= =======
Euro¹ €1,375m €356m €343m €460 €1,058m €3,592m
US Dollars² $1,938m $502m $484m $648 $1,492m $5,064m
·
² My conversions to USD at Interbank rates on January 1, 2008 and December 31 2008
... <snip> The IPR provision is based on estimated future settlements for asserted and unasserted past IPR infringements. Final resolution of IPR claims generally occurs over several periods. In 2008, EUR 379 million usage of the provisions mainly relates to the settlements with Qualcomm, Eastman Kodak, Intertrust Technologies and ContentGuard. ###
[With Qualcomm settled the IPR Infringement Provision has been reduced by €202 million ($285 million USD) this year.]
Note: In addition to InterDigital the IPR Infringement Provision probably is intended to cover IPCom should either or both settle this year, however they settle.
>> IPCom (page 124)
In December 2006, we filed an action in Mannheim, Germany for a declaration that Robert Bosch GmbH was obligated to honor its agreement to grant Nokia a license on fair, reasonable and non-discriminatory terms. Bosch’s patent portfolio was sold to IPCom, and IPCom was joined to the action. Bosch and IPCom counterclaimed against us demanding payment of royalties. We are further seeking a declaration that Bosch is liable for damages caused by the sale of the portfolio in breach of the agreement. Argument was heard in December 2007 and October 2008. Judgment is expected in April 2009.
In December 2007, IPCom filed an action against Nokia in Mannheim, Germany claiming infringement of eight patents. Five of the eight patents are alleged to be essential to standards relating to multimedia messaging services. In April 2008, IPCom filed infringement proceedings in Mannheim on a further three patents. Nokia responded by filing nullity actions in the German Patents Court in relation to these 11 patents along with other IPCom patents which it had included in its “proud list” of patents. The trials of the infringement actions have commenced and the last trials are expected to be heard in the second quarter of 2009. On December 5, 2008 the Mannheim Court handed down its judgment on the first of the 11 patents that found Nokia not to be infringing. IPCom has also withdrawn one other patent action and two others are stayed pending invalidity proceedings.
In March 2008, IPCom sued Nokia in Bologna, Italy on 44 European patents, seeking declarations of infringement in relation to the relevant Italian and UK designations along with declarations of validity of both the Italian and UK designations. In November 2008, IPCom withdrew the case in its entirety.
In September 2008, in response to the Italian action on IPCom’s UK patents, Nokia commenced revocation proceedings in England against 15 of those patents. IPCom responded by bringing infringement actions in relation to three of the patents in issue. The trials for infringement and revocation actions are due to take place between November 2009 and October 2010.
In January 2009, IPCom brought a claim in Dusseldorf against certain members of Nokia’s Group Executive Board in their personal capacities (but not any company in the Nokia Group) asserting one of the patents in suit in Mannheim. No trial date has yet been set. ###
They also discuss the concluded Qualcomm agreement ...
>> Qualcomm (page 124)
Our payment obligations under the subscriber unit cross-license agreements signed in 1992 and 2001 with Qualcomm Incorporated (“Qualcomm”) expired on April 9, 2007. The parties entered into negotiations for a new license agreement with the intention of reaching a mutually acceptable agreement on a timely basis. The wireless industry landscape had changed significantly since the terms of the previous agreements were set, and Nokia’s intention was to negotiate a new license agreement based on today’s business realities, including the current value of Qualcomm’s newer patent portfolio and Nokia’s IPR position in relevant technology standards. Prior to the commencement of negotiations and as negotiations proceeded, Nokia and Qualcomm were engaged in numerous legal disputes in the United States, Europe and China. See our Annual Report on Form 20-F 2007, Item 8A7. “Litigation—Qualcomm” for details of those disputes.
On July 24, 2008, Nokia and Qualcomm entered into a new license agreement covering various current and future standards and other technologies, and resulted in the settlement of all outstanding litigation between the companies. Under the terms of the 15 year agreement covering various standards, including GSM, EDGE, CDMA, WCDMA, HSDPA, OFDM, WiMax, LTE and other technologies, Nokia has been granted a license under all Qualcomm’s patents for use in Nokia’s mobile devices and Nokia Siemens Networks infrastructure equipment, and Nokia has agreed not to use any of its patents directly against Qualcomm. The financial terms included a one-time lump-sum cash payment of EUR 1.7 billion made by Nokia to Qualcomm in the fourth quarter of 2008 and ongoing royalty payments to Qualcomm. The lump-sum payment made to Qualcomm will be expensed quarterly over the term of the agreement. Nokia also agreed to assign ownership of a number of patents to Qualcomm. ###
- Eric -
