Nokia 2009 Annual Report Download - page 245

28. Commitments and contingencies (Continued)
these funds Nokia is committed to capital contributions and also entitled to cash distributions
according to respective partnership agreements.
The Group is party of 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 outcome of and liabilities in excess of what has been provided for
related to these or other proceedings, in the 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, 2009, the Group had purchase commitments of EUR 2 765 million (EUR 2 351 million
in 2008) relating to inventory purchase obligations, service agreements and outsourcing arrangements,
primarily for purchases in 2010.
29. 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
2010 .................................................................... 348
2011 .................................................................... 254
2012 .................................................................... 180
2013 .................................................................... 131
2014 .................................................................... 99
Thereafter ................................................................ 210
Total..................................................................... 1222
Rental expense amounted to EUR 436 million in 2009 (EUR 418 million in 2008 and EUR 328 million in
2007).
F71
Notes to the Consolidated Financial Statements (Continued)