Nokia and Motorola have entered into a license agreement, which covers patents related to 4G cellular technologies such as LTE (Long-Term Evolution), WiMax and LTE-Advanced, the two companies announced on Friday.
The two companies have extended their existing intellectual property licensing agreement to include 4G cellular technologies as well. The terms of the agreement are confidential, according to a statement.
In July, Nokia Siemens -- a venture between Nokia and Siemens -- announced that it would buy Motorola's telecom network equipment business for US$1.2 billion. The patent deal may be a way for the two vendors to show that they are on the same wavelength, according to Sylvain Fabre, research director in the Carrier Network Infrastructure group of Gartner.
The need for companies to agree on how licensing revenues from LTE are to be divvied up is increasing as the roll out of the technology is slowly starting to pick up speed. So far, commercial services have been launched in Sweden, Norway, the U.S. and Uzbekistan, and up to 22 LTE networks will be in commercial service by the end of this year, according to the Global Mobile Suppliers Association (GSA).
However, there is still a lot of work to be done until all patents related to LTE have been discovered and agreements have been signed. That will probably take another three to four years, according to Fabre. Today, deals between vendors are combined with Sisvel, Via Licensing and MPEG LA that are all trying to recruit companies to their respective patent pools. That is too much for licensing to work effectively, Fabre said, adding that two pools are enough.