RIM’s First Patent Payment to Nokia: $65 Million
When Research In Motion settled its patent dispute with Nokia last week, the company agreed to make a “one-time payment and on-going payments” to its Finnish adversary. But the size of those payments wasn’t disclosed, and the terms of the deal were kept confidential.
Now, not a week later, the first hard numbers from the deal are emerging. According to a recent filing with the Securities and Exchange Commission, RIM’s first payment to Nokia — the one made up front — totaled in excess of $50 million.
“On December 21, 2012, Nokia and RIM announced that they have entered into a new patent license agreement,” RIM explained in a 6-K filing. “The agreement will result in the settlement of all patent litigation between the companies and Nokia’s dismissal of all pending actions in the United States, United Kingdom, Canada and Germany. The financial structure of the agreement includes a lump sum EUR50m (approximately $65m) one-time payment, which has been recorded in the Company’s consolidated statement of operations in the third quarter of fiscal 2013.”
The 6-K doesn’t specify what sort of arrangement the companies have made with regard to ongoing royalty payments. But it’s conceivable that their yearly total could run nearly as high as this first upfront payment, particularly if the agreed-upon royalty rate falls in the $2- to $5-per-handset range that some analysts expect.