Nokia 2011 Annual Report Download - page 38

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 alleged 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 are not yet 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 we use and rely on, 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. As the
number of market entrants and the complexity of technology increases, it remains likely that we will
need to obtain licenses with respect to existing and new standards from other licensors. While we
believe that any such intellectual property rights declared or actually 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 Standards 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
our corporate structure or in companies under our 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.
Nokia Siemens Networks has access to certain licenses through cross-licensing arrangements with its
current shareholders, Nokia and Siemens. If there are changes to Nokia Siemens Networks’ corporate
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