Nokia 2015 Annual Report Download - page 44

42 NOKIA IN 2015
Nokia Technologies
Nokia Technologies pursues new business
opportunities building on our innovations and
the Nokia brand. Nokia Technologies develops
and licenses cutting-edge innovations that
are powering the next revolution in computing
and mobility. The Nokia Technologies strategy
consists of: 1) patent licensing, focused
onlicensing standard-essential and other
patents in the Nokia Technologies portfolio to
companies in the mobile devices market and
beyond; 2) technology licensing, focused on
licensing proprietary technologies to enable
our customers to build better products;
3)brand partnerships, to help our customers
leverage the value of the Nokia brand in
consumer devices; and 4) incubation, focused
on developing new products and solutions in
the areas of Digital Media and Digital Health.
All of these activities are supported by
Labs,its world-class R&D team. For more
information on the Nokia Technologies
business, refer to “Business overview—
Nokia in 2016—Nokia Technologies”.
Monetization strategies of IPR
Success in the technology industry requires
signicant R&D investments, with the
resulting patents and other IPR utilized to
protect and generate a return on those
investments and related inventions. In recent
years, we have seen new entrants in the
mobile device industry, many of which do not
have licenses to our patents. Our aim is to
approach these companies by potentially
using one or more means of monetization.
Webelieve we are well-positioned to protect,
and build on, our existing industry-leading
patent portfolios, and consequently to
increase our shareholders’ value.
We see a number of means of monetizing
ourinnovations: on the one hand we seek
tolicense our patent portfolios, the Nokia
brand and new technological innovations
tobe integrated into other companies’
products and services. On the other hand,
ourincubation activities may also, from time
to time, lead to concepts that we bring to
themarket ourselves as products or services
like OZO, the extraordinary virtual reality
camera designed and built specically for
professional content creators. Overall, we
have sharpened our focus in research and
product development in alignment with the
strategic growth opportunities we see
emerging in theareas of digital health and
digital media, including preventive health
careand immersive virtual reality.
General trends in IPR licensing
In general, there has been increased focus
onIPR protection and licensing, and this
trendis expected to continue. As such, new
agreements are generally a product of lengthy
negotiations and potential litigation or
arbitration, and therefore the timing and
outcome may be dicult to forecast. Due to
the structure of patent license agreements,
the payments may be very infrequent, at
times may be partly retrospective, and the
lengths of license agreements can vary.
Additionally, there are clear regional
dierences in the ease of protecting and
licensing patented innovations. We have seen
some licensees actively avoiding making
license payments, and some licensors using
aggressive methods to collect them; both
behaviors have attracted regulatory attention.
We expect the discussion on the regulation
oflicensing to continue on both a global and
aregional level. Some of those regulatory
developments may be adverse to the
interests of technology developers and
patentowners, including us.
In patent licensing, the main opportunities
weare pursuing are: 1) renewal of existing
license agreements, and negotiating new
license agreements with mobile device
manufacturers; and 2) expanding the scope
oflicensing activities to other industries,
inparticular those that implement mobile
communication technologies. We no longer
need patent licenses for our former Devices
&Services business, enabling possibilities
toimprove the balance of inbound and
outbound patent licensing.
In technology licensing the opportunities
aremore long-term in our view, but we will
look at opportunities to license technologies
developed by Nokia Technologies and
delivered to partners in consumer electronics
as solutions or technology packages that can
be integrated into their products and services
to help enable the Programmable World.
In brand licensing, we will continue to seek
further opportunities to bring the Nokia brand
into consumer devices, by licensing our brand
and other intellectual property, as well as,
forexample, industrial design.
To grow each of the aforementioned business
programs, it is necessary to invest in
commercial capabilities to support them.
Principal industry trends
aecting operations continued