Nokia 2008 Annual Report Download - page 211

29. Commitments and contingencies (Continued)
The Group is party to routine litigation incidental to the normal conduct of business, including, but
not limited to, several claims, suits and actions both initiated by third parties and initiated by Nokia
relating to infringements of patents, violations of licensing arrangements and other intellectual
property related matters, as well as actions with respect to products, contracts and securities. In the
opinion of the management the outcome of and liabilities in excess of what has been provided for
relating to these or other proceedings, in aggregate, are not likely to be material to the financial
condition or result of operations.
Nokia’s payment obligations under the subscriber unit crosslicense agreements signed in 1992 and
2001 with Qualcomm Incorporated (“Qualcomm”) expired on April 9, 2007. The parties entered into
negotiations for a new license agreement with the intention of reaching a mutually acceptable
agreement on a timely basis. Prior to the commencement of negotiations and as negotiations
proceeded, Nokia and Qualcomm were engaged in numerous legal disputes in the United States,
Europe and China. On July 24, 2008, Nokia and Qualcomm entered into a new license agreement
covering various current and future standards and other technologies, and resulting in a settlement of
all litigation between the companies. Under the terms of the 15 year agreement covering various
standards and other technologies, Nokia has been granted a license under all Qualcomm’s patents for
use in Nokia’s mobile devices and Nokia Siemens Networks infrastructure equipment, and Nokia has
agreed not to use any of its patents directly against Qualcomm. The financial terms included a one
time lumpsum cash payment of EUR 1.7 billion made by Nokia to Qualcomm in the fourth quarter of
2008 and ongoing royalty payments to Qualcomm. The lumpsum payment made to Qualcomm will
be expensed over the term of the agreement. Nokia also agreed to assign ownership of a number of
patents to Qualcomm.
As of December 31, 2008, the Group had purchase commitments of EUR 2 351 million
(EUR 2 610 million in 2007) relating to inventory purchase obligations, service agreements and
outsourcing arrangements, primarily for purchases in 2009.
30. Leasing contracts
The Group leases office, manufacturing and warehouse space under various noncancellable operating
leases. Certain contracts contain renewal options for various periods of time.
The future costs for noncancellable leasing contracts are as follows:
Operating
leases
Leasing payments, EURm
2009 .................................................................... 315
2010 .................................................................... 243
2011 .................................................................... 179
2012 .................................................................... 127
2013 .................................................................... 98
Thereafter ................................................................ 194
Total..................................................................... 1156
Rental expense amounted to EUR 418 million in 2008 (EUR 328 million in 2007 and EUR 285 million in
2006).
31. Related party transactions
Nokia Pension Foundation is a separate legal entity that managed and held in trust the assets for the
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Notes to the Consolidated Financial Statements (Continued)