Nokia 2009 Annual Report Download - page 27

From time to time, some existing patent licenses may expire or otherwise become subject to
renegotiation. The inability to renew or finalize such arrangements with acceptable commercial terms
may result in costly and timeconsuming litigation, and any adverse result in any such litigation may
lead to restrictions on our ability to sell certain products and services, including applications and
content, and could result in payments that potentially could have a material adverse effect on our
operating results and financial condition. These legal proceedings may continue to be expensive and
timeconsuming and divert the efforts of our management and technical personnel from our business,
and, if decided against us, could result in restrictions on our ability to sell our products and services,
including applications and content, require us to pay increased licensing fees, substantial judgments,
settlements or other penalties and incur expenses that could have a material adverse effect on our
business, results of operations and financial condition.
Our patent license agreements may not cover all the future businesses that we may enter; our
existing businesses may not necessarily be covered by our patent license agreements if there are
changes in Nokia’s corporate structure or in companies under Nokia’s control; or our newlyacquired
businesses may already have patent license agreements with the terms that differ from similar terms
in our patent license agreements. This may result in increased costs, restrictions to use certain
technologies or timeconsuming and costly disputes whenever there are changes in our corporate
structure or in companies under our control, or whenever we enter new businesses or acquire new
businesses.
We make accruals and provisions to cover our estimated total direct IPR costs for our products and
services and their combinations. The total direct IPR cost consists of actual payments to licensors,
accrued expenses under existing agreements and provisions for potential liabilities. We believe that
our accruals and provisions are appropriate for all technologies owned by others. The ultimate
outcome, however, may differ from the provided level which could have a positive or negative impact
on our results of operations and financial condition.
Any restrictions on our ability to sell our products and services and their combinations due to
expected or alleged infringements of thirdparty intellectual property rights and any intellectual
property rights claims, regardless of merit, could result in material losses of profits, costly litigation,
the payment of damages and other compensation, the diversion of the attention of our personnel,
product shipment delays or the need for us to develop noninfringing technology or to enter into a
licensing agreement. If licensing agreements were not available or available on commercially
acceptable terms, we could be precluded from making and selling the affected products and services,
or could face increased licensing costs. As new features are added to our products and services and
their combinations, we may need to acquire further licenses, including from new and sometimes
unidentified owners of intellectual property. The cumulative costs of obtaining any necessary licenses
are difficult to predict and may over time have a negative effect on our operating results. See
Item 4B. “Business Overview—Devices & Services—Patents and Licenses”, “—NAVTEQ—Patents and
Licenses” and “—Nokia Siemens Networks—Patents and Licenses” for a more detailed discussion of
our intellectual property activities.
Our products and services and their combination include numerous Nokia, NAVTEQ and Nokia
Siemens Networks patented, standardized or proprietary technologies on which we depend.
Third parties may use without a license or unlawfully infringe our intellectual property or
commence actions seeking to establish the invalidity of the intellectual property rights of
these technologies. This may have a material adverse effect on our business and results of
operations.
Our products and services and their combination include numerous Nokia, NAVTEQ and Nokia Siemens
Networks patented, standardized or proprietary technologies on which we depend. Despite the steps
that we have taken to protect our technology investment with intellectual property rights, we cannot
be certain that any rights or pending applications will be granted or that the rights granted in
connection with any future patents or other intellectual property rights will be sufficiently broad to
25