Nokia and HTC have entered into a patent and technology collaboration agreement. As a result all pending patent litigation between the two companies, which spanned seven countries and multiple technology areas, has been settled. As a result of the agreement HTC will make payments to Nokia, essentialy marking a victory for Nokia in the dispute between the two companies.

The technology collaboration portion of the agreement is in reference to HTC's LTE patent portfolio. The logical assumption here is that Nokia will help HTC gain revenue from its 4G related intellectual property, potentially by bundling it with Nokia's own intellectual property portfolio. The two companies note that they will also explore future technology collaboration opportunities.

The full terms of the agreement are confidential, which means there is unlikely to be any disclosure of the level of payments that HTC is making to Nokia. HTC already pays a license fee to Nokia for standard essential patents (SEPs), but this will now be increased, reflecting an additional license fee for non-SEPs.

Paul Melin, chief intellectual property officer at Nokia, said:

"We are very pleased to have reached a settlement and collaboration agreement with HTC, which is a long standing licensee for Nokia's standards essential patents. This agreement validates Nokia's implementation patents and enables us to focus on further licensing opportunities."

Grace Lei, General Counsel of HTC, said:

"Nokia has one of the most preeminent patent portfolios in the industry. As an industry pioneer in smartphones with a strong patent portfolio, HTC is pleased to come to this agreement, which will enable us to stay focused on innovation for consumers." 

Florian Mueller, writing on FOSS Patents, suggests that HTC may have agreed to settle because it was facing a potential US import ban from this coming Monday as a result of an ITC ruling. He also noted that the agreement "simplifies things with a view to the formal closing of Microsoft's acquisition of Nokia's wireless devices business", especially since HTC and Microsoft have an existing cross-licensing agreement.

For Nokia, the agreement, quite apart from any financial implications, is important strategically because it underlines the strength of the Nokia patent portfolio. Given previous litigation prompted agreements with Apple (2011) and BlackBerry (2012), plus the in place licensing agreements with Samsung, Huawei, LG, Lenovo, and many others it appears that any company wishing to manufacture smartphone will be obliged to make patent related licensing payments to Nokia.