Nokia and LG sign patent agreement: What Zambian businesses can learn from it

Nokia has signed a royalty-bearing patent agreement with LG of whose nature has not yet been specified, but it shows that Nokia still has a very strong presence in the technology world. Even though we won’t be seeing phones directly produced by Nokia as it sold its mobile phone production business to Microsoft for $7.2 billion, we can expect that there will be a lot more deals being made with Nokia and this is why.

Nokia apparently has over 30,000 patents in the mobile technology industry ranging from 2G to 4G product licenses, how devices connect to each other, and so many more, and some of these are licensed by over 60 companies. Other technology firms need access to these patents in order to make some of their products/technologies. These patents cost money to obtain so Nokia is still going to make money for a long time to come. The clever approach was to get as many patents as possible during the initial stages of their operations. A perk of being one of the first in the mobile industry? Most likely.

This new patent deal with LG requires LG to pay them royalties for using it. Nokia started a mobile licensing deal some time back and LG is the second major company after Microsoft to sign up for one.

There has been concern that since Nokia sold its mobile phone making business, it would just become a patent-troll, making tonnes of money off other businesses that are trying to create products requiring a license from Nokia’s extensive shelf of patents, allowing Nokia to sue if anyone creates a product that they are restricted by the patents Nokia owns to do so. So far there has not been any cases of such and we would like to think Nokia just didn’t become a money-hungry monster company overnight.

However, the rate of royalties from LG to Nokia has not yet been decided on the patent with Ramzi Haidamus, president of Nokia Technologies, stating “We are pleased to welcome LG Electronics to our licensing program. We’ve worked constructively with LG Electronics and agreed to a mutually beneficial approach, including the use of independent arbitration to resolve any differences. This agreement sets the scene for further collaboration between our companies in future.” You can read the full agreement here.

Arbitration will mean they both have to seek independent third-party legal counsel on the most appropriate rate of the royalties that Nokia will receive from LG and could take to up to as much as 2 years to be determined. In the meantime, LG can still use the Nokia’s technologies patent.

What lesson can Zambian businesses learn from this?

That they need to start patenting whatever ideas or businesses they own to prevent others from copying it without permission, and at a fee, from you. This is one way to make profits, boost more companies working together, encourage the production of better technologies for the country, and increase general economic wellbeing as that money circulates the system. All these are licensed at the Patents and Companies Registration Act (PACRA) in Zambia whose function is to ‘ensure Zambia’s continued adherence to the various conventions and treaties on the protection of intellectual property, namely, trademarks, patents and industrial designs’. You can get all information on how to contact PACRA here.