Nokia, Xiaomi ink patent cross license deal as both companies increase global smartphone sales

By Steve Brachmann
July 15, 2017

“Xiaomi Redmi Note 2” by xshamx. Licensed under CC BY-SA 2.0.

Finnish telecom firm Nokia (NYSE:NOK) and Chinese mobile handset developer Xiaomi recently issued a joint press release announcing a multi-year patent cross license agreement granting both companies access to standard essential patents (SEPs) owned by either firm in the cellular space. In addition, Xiaomi bought patents from Nokia outright. Details on financials and the patents involved were not included in the press announcement.

The terms of the agreement also include a pact to work collaboratively on certain developmental projects. Nokia is providing network infrastructure equipment which will meet high-capacity and low-power criteria which is required by large web service providers and datacenters. Nokia’s FP4 network processor will be used between the companies for Internet protocol (IP) address routing. Together, the companies will develop optical transport solutions for datacenter interconnect as well as a data center fabric solution. Further, Nokia and Xiaomi have also agreed to commit to future collaboration on projects in the Internet of Things, augmented reality, virtual reality and artificial intelligence spaces.

This agreement is the most recent move made by Xiaomi to improve its corporate profile outside of China. This March, Xiaomi began smartphone production at its second factory in India, having entered the country in 2014. In India alone, Xiaomi’s 2016 revenues reached $1 billion and the company hopes that sales in that country to double through 2017. Xiaomi’s domestic sales in China lagged in 2016, when it saw a 36 percent decline in sales compared to 2015 and it was fifth-place in the Chinese market after placing first in 2015. This February, Xiaomi announced that it would develop a phone based on a chipset designed in-house in a bid to differentiate itself from the competition. The company has also recently announced plans to build 1,000 “Mi Homes” across China by 2019 to improve its physical presence in its domestic market.

The cross-licensing agreement also comes at a time when HMD Global, the exclusive licensee of Nokia phones and tablets, looks to bring the Nokia brand back into some familiar markets. News reports on the to-be-released Nokia 8 indicate that the model will likely be geared towards high-end consumers. HMD Global is bringing Nokia back into the U.S. smartphone market in the weeks to come with low-end models costing about $200 to $300 to avoid competition with Apple and Samsung. Although its reported revenues for the first quarter lagged 2.5 percent year-over-year, Nokia’s stock price has risen about 28 percent since the beginning of the 2017 calendar year.

According to a white paper released by Nokia, the company held 30,000 individual patents across 9,900 patent families as of 2016. According to reporting from CNBC, Xiaomi has applied for 16,000 patents since its founding and has been granted 4,000 patents, 1,887 of which are from markets outside of China.

[Correction: A previous version of this story said that Nokia, and not its licensee HMD Mobile, was bringing its own brand back into the U.S. market.]

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 43 Comments comments.

  1. Tesia Thomas July 15, 2017 9:35 am

    This helps me in a debate with Anon in one of your other articles Steve.

    Nokia is supposedly an NPE but they cross license.
    Cross licensing benefits NPEs.

    Actual Reduction to practice = R&D if you make and use prototypes

    It’s also proven in that R&D is enough for infringement.

    Just goes to show how weak the NPE patent troll argument is.
    Most touted NPEs practice their tech through r&d.

  2. Tesia Thomas July 15, 2017 9:47 am

    Either that or NPE r&d is a double standard.

    It hurts you when infringing others but doesn’t help when others infringe your stuff.

  3. Anon July 15, 2017 10:07 am

    Nokia is supposedly an NPE

    Since when?

    No, Tesia, this does NOT help you.

    This only shows that you remain incapable of grasping basics.

  4. Tesia Thomas July 15, 2017 10:49 am

    Nokia is touted as NPE
    http://bgr.com/2014/08/28/nokia-vs-samsung-patent-suit/

  5. Tesia Thomas July 15, 2017 10:53 am

    Anyone someone doesn’t like becomes NPE. lol

    Here’s Nokia v. interdigital where thr court said ID’s licensing is business use.
    So they said ID isn’t NPE becausr licensing is business use

    http://www.law360.com/articles/480328/high-court-rejects-nokia-call-to-keep-npe

  6. Tesia Thomas July 15, 2017 11:00 am

    Another Nokia troll source:www.laipla.net/nokia-the-new-npepaepmepatent-troll/

  7. Tesia Thomas July 15, 2017 11:00 am

    Since when you say Anon?

    Since at least 2013.
    Hahaha

  8. Anon July 15, 2017 12:06 pm

    All this shows Tesia, is that the propaganda of “Tr011” is widerspread and inconsistent.

    Those in the know, already know this.

    Take a look at Ron Katznelson’s past attempts to have the White House retract its own propaganda “Tr011” nonsense.

  9. Tesia Thomas July 15, 2017 12:10 pm

    That’s what I’m saying. Look at my first comment.

    You said Nokia is not NPE. I showed sources proving you wrong.

  10. Tesia Thomas July 15, 2017 12:20 pm

    Anon you werent saying that NPE was inconsistent.

    You said “when was Nokia an NPE?”
    To which I responded “since 2013.”

  11. Anon July 15, 2017 2:37 pm

    What you showed was a source that provides that the term is not consistent.

    Nokia makes products after all, eh?

    So your “source” has a product making entity a non-practicing entity….

    I “get” that you are new to this Tesia.

    I do wish that you had a little more wisdom for terms of art and a lot less attempting at your “Woe to attorneys” mantra that undergirds your “contributions” across these several threads.

  12. Tesia Thomas July 15, 2017 4:03 pm

    Well Anon you didn’t know that obviously.

  13. Tesia Thomas July 15, 2017 4:25 pm

    In this case, Nokia isn’t making phones. Xiaomi is.
    Nokia is doing r&d.

    Nokia isn’t a smart phone maker anymore but it’s still a smart phone brand.

    I keep the NPE consistent.
    The NPE as you said Nokia wasn’t has just made this cross license deal.www.google.com/amp/m.tech.

    Anything with phones means Nokia so called-NPE that does r&d. Just Nokia branded phones.

    firstpost.com/amp/news-analysis/nokia-smartphones-in-2017-may-be-dead-on-arrival-because-the-real-nokia-has-moved-on-341930.html

    So yes. You are proven wrong the Nokia phone cross license is for r&d. Steve’s article affirms my position.

  14. Anon July 15, 2017 4:40 pm

    Except it does not – for the very reason that “Tr011” is NOT a solidly set word, and IS prone to excessive propaganda.

    You don’t even know what you don’t know in this realm, Tesia.

  15. Tesia Thomas July 15, 2017 4:41 pm

    Domestic industry requirement includes r&d
    http://itlaw.wikia.com/wiki/Domestic_industry_requirement

  16. Tesia Thomas July 15, 2017 4:43 pm

    Hahaha. Well if it’s not solidly set then how were you able to claim something was a troll or wasn’t a troll?

  17. Tesia Thomas July 15, 2017 5:07 pm

    “Nokia is supposedly an NPE ”

    Since when?


    so your “source” has a product making entity a non-practicing entity….

    Except it does not – for the very reason that “Tr011” is NOT a solidly set word, and IS prone to excessive propaganda.


    Pick one Anon.

    How can they be an NPE and not an NPE while never being considered an NPE and the term NPE not meaning anything?

  18. Tesia Thomas July 15, 2017 5:15 pm

    “Yesterday’s Major Manufacturer is Tomorrow’s “Patent Troll”: The myth that an NPE/PAE/PME/”Troll” necessarily has “bad” patents is further shattered by the emergence of Nokia as the major NPE/PAE/PME/”Patent Troll” in the handset industry. ”

    Yep. Nokia deemed NPE in smartphones/handsets.
    This article is talking about smartphones/handsets.

    So, it’s the purported troll/NPE Nokia which is cross-licensing.

    It’s not that hard to follow along Anon.

  19. Tesia Thomas July 15, 2017 5:33 pm

    Nokia phone manufacturing became Microsoft Mobile then sold the rights to manufacture to HMD Global and now they (Nokia) don’t manufacture phones any longer.

    Again, “Since when?” = Since Nokia sold it’s manufacturing to Microsoft.

  20. Tesia Thomas July 15, 2017 5:41 pm

    Ooh. Gene Quinn agrees with me.
    R&D = not NPE

    http://www.ipwatchdog.com/2017/04/19/studying-ipr-ptab-repaired-replaced-repealed-congress/id=82203/

    Read his comment 18-19.
    Since I just don’t understand these things, I’ve appealed to a subject matter expert named Gene Quinn.
    🙂

  21. Tesia Thomas July 15, 2017 5:50 pm

    Oh, and it’s a valid form of “appeal to authority”, not fallacious.

    Tell Gene he’s wrong. I’m tired of talking to you.

  22. Anon July 15, 2017 6:14 pm

    How can they be an NPE and not an NPE while never being considered an NPE and the term NPE not meaning anything?

    You keep on ASSuming that the “Tr011” narrative somehow must be logically consistent.

    Are you really that wet behind the ears?

  23. Tesia Thomas July 15, 2017 6:16 pm

    Already affirmed by Gene’s comments. But, thanks Anon.

    I answered your question.

    Since when, you said.
    Since Nokia sold to Microsoft, I said.

  24. Benny July 16, 2017 5:33 am

    You only have to pop over to Nokia’s website to understand that they are not an NPE. As an E, they P a lot.
    I would assume that neither Xiaomi nor Nokia have any interest in cross licencing patents covering products which are already on the market – rather, they need industrial tranquility for products in development, which currently we know nothing about, but are probably more related to IOT and broadband communication than handsets (did you, Anon and Tesla, take a look at the recent patents granted to both companies? I did).

  25. Anon July 16, 2017 7:53 am

    You only have to pop over to Nokia’s website to understand that they are not an NPE.

    Yes, Benny, that is true – but why let such easy access facts ruin Tesia’s rant? After all, she read her version on the internets….

  26. Benny July 16, 2017 9:16 am

    Whoa, I wrote “Tesla” instead of “Tesia”. Sorry, all. I need to adjust the resolution on my monitor. Maybe subconscious association with Nikola Tesla and Thomas Edison – Dc vs AC.

  27. Tesia Thomas July 16, 2017 10:32 am

    They aren’t manufacturing smartphones on their site.

  28. Tesia Thomas July 16, 2017 10:35 am

    They are cross licensing for smart phone SEPs and want to work on future iot projects too per Steves article.

  29. Benny July 16, 2017 10:45 am

    Tesia,
    Cross licensing keeps the litigation lawyers’ noses out of the R&D food trough, so I would assume it is a Good Thing.
    You somehow linked to the updated zipper design I’ve been reading about ?

  30. Tesia Thomas July 16, 2017 10:50 am

    Right. That’s what I said Benny. Because cross licensing is necessary as r&d constitutes practice.
    I’m saying the smartphone Nokia is touted as NPE (read my first comment) and entering this cross license (note Nokia Bell Labs signs the press release) but that’s not right because none of Nokia is NPE if they do r&d.

  31. Tesia Thomas July 16, 2017 10:54 am

    Yes. The zipper.
    It’s amazing. ‘Bigger’ than I am with what it means for the world of aerospace, space, fashion, industrial packaging, agriculture, etc.
    It’s 100% recyclable in its virgin state (no coatings or printing on it, just polymer or elastomer and metal)

    I’m growing to catch up to its greatness and get it to market.

    Lol right now I’m NPE because I’m conducting R&D (/sarcasm/.)

  32. Benny July 16, 2017 11:14 am

    Is it something along the lines of US3176364 (see figure 16) ? That looked like it had promise as a zipper replacement.

  33. Tesia Thomas July 16, 2017 11:18 am

    No. That patent is really a Ziploc by another shape.
    But I’m using that as prior art. It’s in my prior art
    Inventor Disclosure docs because PTAB.

    PTAB means I might be using buttons as prior art for my zipper Lol.

  34. Tesia Thomas July 16, 2017 11:19 am

    Couldn’t PTAB take the broadest reasonable interpretation that a zipper is a fastener and precluded by buttons which fasten?

    Woe is me haha

  35. Eric Berend July 16, 2017 8:19 pm

    @ 11., ‘Anon’:

    Despite the exasperation I have expressed with some attorneys’ actions aiding the degradation and eventual possible ruination of the U.S. patent practitioner domain, I do not necessarily wish ill upon attorneys in general nor those specializing in this field. In fact, I hope for a restoration of a healthy, Constitutionally valid market for patent attorneys’ counsel and services, in the United States. Certainly, if there’s economic pricing power in inventors’ properties known as patents, then it follows that there will be enough wherewithal to pay the lawyers.

    Right now, it’s become painfully obvious that, outside of slogging through the patent portfolio wars mire for a whale-sized tech entity, hiring opportunities are shrinking – fast.

    I do find fault with the notion that significant cohorts of that overall population, are entirely innocent of or oblivious to the damage they help to cause, in the drafting of legislation such as the AIA; in the ever-so carefully crafted amici curae rbriefs filed with CAFC and SCOTUS in numerous cases consistently arguing for ever weaker patent protections; and, in the representations made to the public about so-called “patent trolls”; while knowing, as officers of the courts, that such a term is pejorative and vague at best.

    The attitude that “they’re only hired guns” or “don’t shoot the messenger”, ignores the truth that attorneys often form the ‘foot soldiers’ in this massive, sleazy paper war. An attorney is never evil or mendacious per se. But, some attorneys do exploit their power in ways that others consider nefarious, on the behalf of forces that don’t contend honestly or ‘fight fair’. That the patent domain is no exception, has only become emphasized in this past decade of wealthy infringer influences against small entity inventors and patent holders.

  36. Tesia Thomas July 16, 2017 8:25 pm

    @Eric

    Anon and I are debating whether the current US patent system is in decline and woeful for attorneys in spite of patent filings increasing or decreasing.

    I’ll just say that it’s a sensitive subject with Anon.
    I’m at 120+ comments.
    http://www.ipwatchdog.com/2017/07/11/waymo-drops-patent-claims-uber/id=85564/#comment-2743260

    Anon, please don’t begin that fight here with Eric.

  37. Tesia Thomas July 16, 2017 9:12 pm

    Also, @Eric…

    History shows ‘hired guns’ aren’t a good excuse. No one is even holding a gun to the attorneys!

    http://www.pbs.org/newshour/rundown/how-the-nazis-defense-of-just-following-orders-plays-out-in-the-mind/

    Yes, I just compared the efficient infringer attorneys to Nazis due to the rationale you mentioned.
    No, they’re not killing people. Just dreams.

  38. Tesia Thomas July 17, 2017 10:59 am

    I think even worse is that these efficient infringer attorneys don’t realize they’re ruining their own field of work!
    Attorneys are being laid off, clients are negotiating low prices, China is talking over innovation.

    They’re hurting themselves and their peers for big bucks now.
    But the whole goal is so that the efficient infringers have less patent stuff to deal with.

  39. Anon July 18, 2017 7:23 am

    Anon, please don’t begin that fight here with Eric.

    LOL – says the person bringing “the fight” to this thread….

    That’s a bit disingenuous of you, Tesia.

  40. Tesia Thomas July 18, 2017 7:59 am

    No Anon. Eric directly tagged you and said the same point I did. This system isn’t good for attorney jobs.

    I merely noted that opinion is a sensitive subject for you and cited my source.

  41. Anon July 18, 2017 1:07 pm

    Methinks the sensitivity is yours, my friend Tesia.

    Me, I just happen to be puncturing a few of your overstated balloons.

    Like bad math 😉

  42. Tesia Thomas July 18, 2017 1:11 pm

    Well then I was merely telling Eric you think his math is bad too.

  43. Anon July 18, 2017 2:51 pm

    merely telling Eric you think his math is bad too.

    I have said no such thing.
    I have intimated no such thing.

    Again – your “logic” is unsound.

    Quite to the contrary, Eric and I are often in agreement, as you might better understand if you had bothered to read some of our interactions.