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Nokia Scores a Hollow Victory

By Anders Bylund - Updated Apr 6, 2017 at 9:15PM

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So where are Nokia's lawyers going next?

"This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper."

-- T.S. Eliot, "The Hollow Men," 1925

That's how Apple (Nasdaq: AAPL) and Nokia (NYSE: NOK) ended their nearly two-year-old web of crosswise lawsuits -- with an anticlimactic settlement.

The conflict escalated to the high heavens, and Nokia ended up with as many as 46 patents involved in multiple suits on both sides of the Atlantic. A case like that can take years to unravel. Appeals and countersuits are the filibusters of the legal world.

But an early settlement has put a lid on all of these actions. The financial terms of the settlement were not disclosed, though Nokia expects it to have a positive effect on the next quarter. Apple is sending some cash to Finland, followed by regularly scheduled license royalties for a few years.

That's a far less dramatic outcome than the halted sales of iPhones that Nokia asked for, and less damaging to the patent system than an outright Apple victory that calls those 46 patents into question. I was convinced that Nokia CEO and former Microsoft executive Stephen Elop would burn every ounce of available gunpowder to reach a more drastic outcome, but it was not to be.

Perhaps Nokia simply decided to get something while the getting was good, then focus on rebuilding its badly damaged handset business. Moreover, Nokia might take this partial victory and go looking for other smartphone builders who should pay up for their use of these patents. Hey, any extra revenue helps.

Patent expert Florian Mueller sees the Finns chasing down Android builders such as Samsung, HTC, and Motorola Mobility (NYSE: MMI) next, given how similar that platform is to Apple's iPhone template. "So from a competitive point of view, I don't think Apple loses much," writes Mueller. "On the bottom line its profitability may even benefit from this because Apple's margins face no greater threat than Android-style commoditization of smartphone technologies."

From there, Research In Motion (Nasdaq: RIMM) shouldn't be far down Nokia's hitlist. Microsoft is obviously safe, or else Nokia's massive commitment to Windows-based smartphones wouldn't be worth much. And I'm not sure if Hewlett-Packard (NYSE: HPQ) and its Palm-based trickle of mobile products would even be worth the trouble. So it's next stop, Androidville.

That's the end of that big-time tussle. I think Nokia won, but it's a minor victory. What's your view? Drop down to the comments box below to share your thoughts.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$165.32 (2.15%) $3.48
HP Inc. Stock Quote
HP Inc.
$36.93 (-1.65%) $0.62
Nokia Corporation Stock Quote
Nokia Corporation
$5.69 (0.53%) $0.03
BlackBerry Stock Quote
$9.03 (1.01%) $0.09

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