Nokia 2010 Annual Report Download - page 30

range of our products 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 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, 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 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 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 and
4G mobile communication technologies, 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.
From time to time, some existing patent licenses may expire or otherwise become subject to
renegotiation. The inability to renew or finalize such arrangements or new licenses 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 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, 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 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.
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