5 ms·

Microsoft's own press release makes clear that they are not buying any patents. They are buying a 10-year license to Nokia's patents. http://www.microsoft.com/

Microsoft's own press release makes clear that they are not buying any patents. They are buying a 10-year license to Nokia's patents. http://www.microsoft.com/en-us/news/press/2013/Sep13/09-02AnnouncementPR.aspx http://www.microsoft.com/en-us/news/press/2013/Sep13/09-02An... This is almost certainly to lubricate regulatory approval, and because it unleashes a Nokia patent monster upon the lands.

wmboy 13y ago
> ...they are not buying any patents. They are buying a 10-year license to Nokia's patents. That's basically the same isn't it? A patent can only remain active for 20 years, assuming most of the patents are several years old the majority of them will be pretty close to expiration in 10 years time. Note: I'm basing this on NZ patent law, but I assuming it's the same for any 1st world country...
- corresation 13y ago
  That's basically the same isn't it? If Microsoft owned the patents they could enforce them against others. As a licensee, they simply protect themselves from Nokia enforcing it against them. As I said elsewhere in here, a Nokia with a big stack of patents and no hardware business is going to be an ugly thing for the industry: They can go gangbusters with patent assaults while having nothing for their victim's to attack in return. All the while Microsoft will be enjoying their 10-year license.
  - lucb1e 13y ago
    > As a licensee, they simply protect themselves from Nokia enforcing it against them. Hmm that sounds rather a lot like mafia. "Pay up or else, no matter whether we're owned by you."
  - digikata 13y ago
    So it smells like a very similar move to the SCO-attack on Linux. Microsoft competitors could get legally assaulted by a zombie Nokia while Microsoft itself is not associated with the legal fight.
  - wmboy 13y ago
    > If Microsoft owned the patents they could enforce them against others. Thanks for the clarification, that makes sense
molmalo 13y ago
You seem to be right. Here's an article [1] with details about the transaction. The main points of the deal are: - Microsoft pays € 5.44 Billions for all of its Devices & Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services production facilities, Devices & Services-related sales and marketing activities, and related support functions. - Nokia will grant Microsoft a 10 year non-exclusive license to its patents as of the time of the closing (with option to extend to perpetuity), and Microsoft will grant Nokia reciprocal rights related to HERE services. - Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four year license. - Microsoft has agreed to make immediately available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible bonds to be issued by Nokia maturing in 5, 6 and 7 years respectively. It is at Nokia’s discretion if it chooses to draw down all or some of these tranches. - To avoid the perception of any potential conflict of interest between now and the pending closure of the transaction, Stephen Elop will step aside as President and CEO of Nokia Corporation, resign from the Board of Directors, and will become Executive Vice President, Devices & Services [1] http://www.efinancehub.com/nokia-corporation-adr-nysenok-doing-cash-transaction-with-microsoft-corporation-worth-eur-5-44-billion/122498.html http://www.efinancehub.com/nokia-corporation-adr-nysenok-doi...
- marcamillion 13y ago
  This particular deal point is interesting to me: Microsoft will also immediately make available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible notes that Microsoft would fund from overseas resources. If Nokia decides to draw down on this financing option, Nokia would pay back these notes to Microsoft from the proceeds of the deal upon closing. The financing is not conditional on the transaction closing. Sounds like Nokia may be running into a cash crunch? They specify that the financing is not dependent on the transaction closing - so it seems as if Nokia needs the money either way, and if the transaction closes they will repay MSFT.
  - RyJones 13y ago
    Cheaper to buy them with money stuck overseas than repatriate and pay taxes on it.
throwawaykf02 13y ago
Why yes, you're right! I totally missed that. And your rationale makes sense as well. As for the Nokia patent monster, well... it's already been rampaging the countryside for a few months now. I haven't thought through the ramifications of this deal, but I wonder if it would allow them the same immunity that trolls enjoy?
- throwawaykf02 13y ago
  Also, I just realized, the rampaging patent monster is another reason MS did not buy the patents outright. Nokia has active lawsuits against many companies and I doubt anybody wants to inherit that kind of baggage.
  - fnordfnordfnord 13y ago
    No, but MS just found a way to bootstrap it.

wmboy 13y ago

> ...they are not buying any patents. They are buying a 10-year license to Nokia's patents. That's basically the same isn't it? A patent can only remain active for 20 years, assuming most of the patents are several years old the majority of them will be pretty close to expiration in 10 years time. Note: I'm basing this on NZ patent law, but I assuming it's the same for any 1st world country...

corresation 13y ago
That's basically the same isn't it? If Microsoft owned the patents they could enforce them against others. As a licensee, they simply protect themselves from Nokia enforcing it against them. As I said elsewhere in here, a Nokia with a big stack of patents and no hardware business is going to be an ugly thing for the industry: They can go gangbusters with patent assaults while having nothing for their victim's to attack in return. All the while Microsoft will be enjoying their 10-year license.
- lucb1e 13y ago
  > As a licensee, they simply protect themselves from Nokia enforcing it against them. Hmm that sounds rather a lot like mafia. "Pay up or else, no matter whether we're owned by you."
- digikata 13y ago
  So it smells like a very similar move to the SCO-attack on Linux. Microsoft competitors could get legally assaulted by a zombie Nokia while Microsoft itself is not associated with the legal fight.
- wmboy 13y ago
  > If Microsoft owned the patents they could enforce them against others. Thanks for the clarification, that makes sense

molmalo 13y ago

You seem to be right. Here's an article [1] with details about the transaction. The main points of the deal are: - Microsoft pays € 5.44 Billions for all of its Devices & Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services production facilities, Devices & Services-related sales and marketing activities, and related support functions. - Nokia will grant Microsoft a 10 year non-exclusive license to its patents as of the time of the closing (with option to extend to perpetuity), and Microsoft will grant Nokia reciprocal rights related to HERE services. - Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four year license. - Microsoft has agreed to make immediately available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible bonds to be issued by Nokia maturing in 5, 6 and 7 years respectively. It is at Nokia’s discretion if it chooses to draw down all or some of these tranches. - To avoid the perception of any potential conflict of interest between now and the pending closure of the transaction, Stephen Elop will step aside as President and CEO of Nokia Corporation, resign from the Board of Directors, and will become Executive Vice President, Devices & Services [1] http://www.efinancehub.com/nokia-corporation-adr-nysenok-doing-cash-transaction-with-microsoft-corporation-worth-eur-5-44-billion/122498.html http://www.efinancehub.com/nokia-corporation-adr-nysenok-doi...

marcamillion 13y ago
This particular deal point is interesting to me: Microsoft will also immediately make available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible notes that Microsoft would fund from overseas resources. If Nokia decides to draw down on this financing option, Nokia would pay back these notes to Microsoft from the proceeds of the deal upon closing. The financing is not conditional on the transaction closing. Sounds like Nokia may be running into a cash crunch? They specify that the financing is not dependent on the transaction closing - so it seems as if Nokia needs the money either way, and if the transaction closes they will repay MSFT.
- RyJones 13y ago
  Cheaper to buy them with money stuck overseas than repatriate and pay taxes on it.

throwawaykf02 13y ago

Why yes, you're right! I totally missed that. And your rationale makes sense as well. As for the Nokia patent monster, well... it's already been rampaging the countryside for a few months now. I haven't thought through the ramifications of this deal, but I wonder if it would allow them the same immunity that trolls enjoy?

throwawaykf02 13y ago
Also, I just realized, the rampaging patent monster is another reason MS did not buy the patents outright. Nokia has active lawsuits against many companies and I doubt anybody wants to inherit that kind of baggage.
- fnordfnordfnord 13y ago
  No, but MS just found a way to bootstrap it.