????The settlement of its epic 20-month patent dispute with Apple (AAPL) that Nokia (NOK) announced early Tuesday could spell trouble for the makers of Android phones.
????There's no question Apple lost the legal battle that pitted its significant intellectual property holdings against Nokia's even deeper patent portfolio. The terms of the settlement were not disclosed, but they require Apple to make a one-time payment and ongoing royalties large enough to materially improve Nokia's earnings for the quarter. Nokia's stock was up 3% in European trading.
????Apple shares also rose on the Frankfurt exchange Tuesday, however. According to FOSS Patents' Florian Mueller, who had predicted this outcome, it frees up resources for both companies.
????"Apple is embroiled in litigation with the three leading Android device makers (Motorola, HTC and Samsung). Nokia doesn't have any litigation worries at the moment, but part of its new strategy is to ratchet up the monetization of its patent portfolio. The fact that Nokia has demonstrated its ability to defeat Apple -- after the most bitterly contested patent dispute that this industry has seen to date -- is a clear proof of concept. Other companies whom Nokia will ask to pay royalties will have to think very hard whether to pay or pick a fight."
????Mueller says Nokia's next target is likely to be the cellphone manufacturers that have hitched their smartphone strategies on Google's (GOOG) software. "Given that Android is in many ways a rip-off of Apple's operating software," he writes, "Android-based devices are highly likely to infringe on largely the same Nokia patents that Apple now felt forced to pay for."
????In prepared statements, Nokia declared victory and Apple expressed relief.
????"We are very pleased to have Apple join the growing number of Nokia licensees," said Nokia CEO Stephen Elop. "This settlement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market."
????"Apple and Nokia have agreed to drop all of our current lawsuits and enter into a license covering some of each others' patents, but not the majority of the innovations that make the iPhone unique," an Apple spokesman told the Wall Street Journal's AllThingsD. "We're glad to put this behind us and get back to focusing on our respective businesses."
????The dispute that started in Oct. 2009 when Nokia claimed that the iPhone was infringing on 10 patents Nokia holds on the integration of GSM, UMTS and wireless LAN, grew through suit and countersuit to the point where it covered a total of 75 patents in seven different legal venues, from Delaware to Dusseldorf.