This document discusses Nokia's efforts to realize value from its large patent portfolio through patent monetization, specifically patent licensing and patent sales. It notes that Nokia has 30,000 patents and applications based on €50 billion in R&D spending. Patent monetization has become more important given rising patenting costs and examples of large patent settlements. The US patent licensing market is estimated at $50-500 billion annually and involves many major tech companies. While patent licensing is sophisticated, patent sales are also a key strategy, though average per-patent prices have declined from the Nortel transaction and supply is increasing from various sources. In conclusion, Nokia focuses on financial returns through quality, scale and creativity in licensing, as well

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IPR Value Creation
Jukka Nihtilä, Director, IP Business Development
November, Espoo, Finland

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Nokia Technologies IP Business
• 30k patents and applications
• Based on a €50 billion cumulative
R&D effort (1991-2013)
• Focus on Standard Essential Patent
Licensing

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IPR Value Creation in 2006
”IPR creates value in many ways”

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• Increased pressure to realize the value of from patent portfolios
• Driven by the increasing cost of patenting and patent portfolio maintenance
• and highly publicized examples of large settlement payments and patent sales
• Patent monetization has become an accepted - even required - practice
1. Patent licensing
2. Patent sales
IPR Value Creation today – Focus on Patent Monetization

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• US patent licensing market $50bn to 500bn *)
• Patent licensing is a fundamental element of the high tech economy
- An enabler of new entrants
- Ensuring fair compensation for technology contributors
• Well established practise in tech industries
- Telecom
- Computer hardware/electronics
- Medical devices
Patent Licensing
*) Deloitte & Touche LLP, 2007 and U.S. Bureau of Economic estimate for 2012

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Key players in the tech industry
”The Billion Club”
Licensing companies

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• Both licensors and licensees have been practising ...
• 3rd party advisory services exist to support
• Early settlements rare, enforced patents will be challenged
• Cost and time to license revenue increasing
• ”Hybrid deals” used to open deadlocks
• The importance of patent quality remains
Patent Licensing is becoming increasingly sophisticated

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• Some patents may create more value outside your portfolio
• Emergence of patents sales market
- Intellectual Ventures acquisition program since 2003
- High-profile transactions - Nortel 2011, AOL 2012, Kodak 2012
• Market today
- 815 open market portfolios on sale in 2013 (RPX)
- 50% of today’s open market portfolios transact in 6 months
- 30-40% of seller’s low-end expectations
Patent sales

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• Peak transaction value reached
- Nortel: ~1MUSD per US patent
- Current average: $150-250kUSD per US patent
• Supply increasing
- Large tech corporations – not only US and EU but JP and CN as well
- Universities
- Individual inventors
- Patent factories
• Strong demand for high-quality patents and concentrated portfolios
- Large technology companies - ”new entrants” in the Tech industries or companies entering new market segments
- Patent aggregators (IV, RPX)
- Buyer consortiums (Nortel, Kodak)
- Patent licensing companies
- Sovereign wealth funds (France Brevets, Intellectual Discovery, IP Bridge, Ruichuan)
Patent sales going forward

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• IPR value creation increasingly focused on financial return on the IP
assets
• Patent licensing calls for quality, scale and creativity
• Patents sales continue to be a key element in patent monetization
Conclusions

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Thank you!
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