Nokia 2007 Annual Report Download - page 40

Our global network of relationships with universities and other industry research and development
parties expands the scope of our longterm technology development. Highlights from 2007 included
the establishment of a new Nokia Research Center site in Cambridge, UK, together with collaboration
with the University of Cambridge; the establishment of the Nokia Innovation Center in Tampere,
Finland, together with collaboration with the Tampere University of Technology; and collaborations
with the Helsinki University of Technology, Finland, and Tsinghua University, China.
Patents and Licenses—Devices
A high level of investment in research and development and rapid technological development have
meant that the role of Intellectual Property Rights, or IPR, in our industry has always been important.
Digital convergence, multiradio solutions, alternative radio technologies, and differing business
models combined with large volumes are further increasing the complexity and importance of IPR.
The detailed designs of our products are based primarily on our own research and development work
and design efforts, and generally comply with all relevant and applicable public standards. We seek to
safeguard our investments in technology through adequate intellectual property protection, including
patents, design registrations, trade secrets, trademark registrations and copyrights. In addition to
safeguarding our technology advantage, they protect the unique Nokia features, look and feel, and
brand.
We have built our IPR portfolio since the early 1990s, investing over EUR 30 billion in research and
development, and we now own more than 11 000 patent families. As a leading innovator in the
wireless space, we have built what we believe to be one of the strongest and broadest patent
portfolios in the industry, extending across all major cellular and mobile communications standards,
data applications, user interface features and functions and many other areas. We receive royalties
from certain handset and other vendors under our patent portfolio.
We are a world leader in the development of the wireless technologies of GSM/EDGE, 3G/WCDMA,
HSPA, OFDM, WiMax, LTE and TDSCDMA, and we have a robust patent portfolio in all of those
technology areas, as well as for CDMA2000. We believe our standardsrelated essential patent
portfolio is one of the strongest in the industry. In GSM, we have declared close to 300 GSM essential
patents with a particular stronghold in codec technologies and in mobile packet data. Our major
contribution to WCDMA development is demonstrated by approximately 360 essential patent
declarations to date. The number of essential patents is expected to increase further due to the rapid
development of higher data rate technologies, an area where we are a particularly strong contributor.
We are a holder of numerous essential patents for various mobile communications standards. An
essential patent covers a feature or function that is incorporated into an open standard which is
deployed by manufacturers in order to comply with the standard. In accordance with the declarations
we have made and the legal obligations created under the applicable rules of various standardization
bodies, such as the European Telecommunication Standardization Institute (ETSI), we are committed
to promoting open standards, and to offering and agreeing upon license terms for our essential
patents in compliance with the IPR policies of applicable standardization bodies. We believe that a
company should be compensated for its IPR based on the fundamentals of reasonable cumulative
royalty terms and proportionality: proportionality in terms of the number of essential patents that a
company contributes to a technology, and proportionality in terms of how important the technology
is to the overall product. Nokia has agreed upon terms of several license agreements with other
companies relating to both essential and other patents. Many of these agreements are crosslicense
agreements with major telecommunications companies that cover broad product areas and provide
Nokia with access to relevant technologies.
Our products and solutions include increasingly complex technology involving numerous patented,
standardized or proprietary technologies. A 3G/WCDMA mobile device, for example, may incorporate
three times as many components, including substantially more complex software, as our 2G/GSM
mobile devices. As the number of entrants in the market grows, as the Nokia product range becomes
more diversified, as our products and solutions are increasingly used together with hardware,
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