Nokia and Samsung are set to announce a settlement regarding the dispute over their two-year patent. Analysts are predicting that the settlement may involve hundreds of millions of Euros in one-time payment for the Finland-based company.
Nokia engaged the South Korean company into a binding arbitration that requires the latter to pay additional compensations involving a five-year period beginning early 2014.
In late 2013, Nokia announced that Samsung will license and pay the Finnish company for a number of patents for five years. The deal started in Jan. 1, 2014. However, the two companies were not able to agree on the price for patent licensing. Thus, they went on arbitration on the pricing which is originally expected to be finalized until 2015.
Since then, the South Korean company and the Finnish company have been battling each other. Charges were thrown by Nokia that executives of Samsung have seen some private licensing details between them and Apple.
The purpose of the arbitration is to find a remedy to their problems without resorting into a very expensive legal battle.
The two companies lodged their arbitration in the International Chamber of Commerce and the legal body is due to announce its decision very soon.
Sami Sarkamies, a Nordea analyst, says that the decision could increase the operating profit of Nokia to the tune of 700 million euros ($758 million) this year.
"Samsung has been paying Nokia probably 100 million per year, and the rate could now come up to around 300 million euros (per year)," says Sarkamies. "The settled rate will also be paid retrospectively for the last two years," he adds.
Once the dominant company in the manufacture of handsets, Nokia is now concentrating on telecom network. However, it still holds a significant portfolio of mobile phone patents. It had been advised by the ICC that by the end of January 2015, its settlement with Samsung will be finalized.
