Nokia 2009 Annual Report Download - page 26

capacity, failure in our manufacturing, service creation and delivery as well as logistics processes,
failures in the activities we have outsourced, and interruptions in the data communication systems
that run our operations. Such failures or interruptions could result in our products and services not
meeting our and our customers’ and consumers’ quality, safety, security and other requirements, or
being delivered late or in insufficient or excess volumes compared to our own estimates or customer
requirements, which could have a material adverse effect on our sales, results of operations,
reputation and the value of the Nokia brand.
Our products and services and their combination include increasingly complex technologies,
some of which have been developed by us or licensed to us by certain third parties. As a
consequence, evaluating the rights related to the technologies we use or intend to use is
more and more challenging, and we expect increasingly to face claims that we have infringed
third parties’ intellectual property rights. The use of these technologies may also result in
increased licensing costs for us, restrictions on our ability to use certain technologies in our
products and services and/or costly and timeconsuming litigation, which could have a
material adverse effect on our business, results of operations and financial condition.
Our products and services and their combination include increasingly complex technologies, some of
which have been developed by us or licensed to us by third parties. As the amount of such
proprietary technologies and the number of parties claiming intellectual property rights continues to
increase, even within individual products, as the range of our products and services and their
combination becomes more diversified and we enter new businesses, and as the complexity of the
technology increases, the possibility of alleged infringement and related intellectual property claims
against us continues to rise. The holders of patents and other intellectual property rights potentially
relevant to our products and services and their combination may be unknown to us, may have
different business models, may refuse to grant licenses to their proprietary rights, or may otherwise
make it difficult for us to acquire a license on commercially acceptable terms. There may also be
technologies licensed to and relied on by us that are subject to infringement or other corresponding
allegations or claims by others which could impair our ability to rely on such technologies. In
addition, although we endeavor to ensure that companies that work with us possess appropriate
intellectual property rights or licenses, we cannot fully avoid the risks of intellectual property rights
infringement created by suppliers of components and various layers in our products and services and
their combinations, or by companies with which we work in cooperative research and development
activities. Similarly, we and our customers may face claims of infringement in connection with our
customers’ use of our products and services, and such claims may also influence consumer behavior.
In many aspects, the business models for mobile services have not yet been established. The lack of
availability of licenses for copyrighted content, delayed negotiations, or restrictive copyright licensing
terms may have a material adverse effect on the cost or timing of contentrelated services offered by
us, mobile network operators or thirdparty service providers, and may also indirectly affect the sales
of our mobile devices.
Since all technology standards, including those used and relied on by us, include some intellectual
property rights, we cannot fully avoid risks of a claim for infringement of such rights due to our reliance
on such standards. We believe that the number of third parties declaring their intellectual property to be
relevant to these standards, for example, the standards related to socalled 3G mobile communication
technologies, including 3GPP and 3GPP2, as well as other advanced mobile communications standards, is
increasing, which may increase the likelihood that we will be subject to such claims in the future. While
we believe that any such intellectual property rights declared and found to be essential to a given
standard carry with them an obligation to be licensed on fair, reasonable and nondiscriminatory terms,
not all intellectual property owners agree on the meaning of that obligation and thus costly and time
consuming litigation over such issues has resulted and may continue to result in the future. While the
rules of many standard setting bodies, such as the European Telecommunication Standardization Institute,
or ETSI, often apply on a global basis, the enforcement of those rules may involve national courts, which
means that there may be a risk of different interpretation of those rules.
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