Chinese Regulators’ Smart Move in Clearing Nokia – Microsoft Deal

Nokia Microsoft DealThe Chinese Ministry of Commerce (MOFCOM) approved Microsoft’s acquisition of Nokia’s Devices and Services business, in a somewhat Smart move that will stand to benefit Chinese Consumers and Companies.

The Big Patent Concern
MOFCOM was concerned with certain Microsoft incentives changing post the deal, reflecting Microsoft’s licensing of some essential patents to vendors using Android software where Microsoft has claimed a small royalty fee. Microsoft is committed to licensing its patents on a FRAND basis and will not see injunctive relief against smartphone players in China on the basis of these patents for patents that are subject to industry standards. For other patents, Microsoft agrees to continue to license its technology for Android smartphones in China and will not raise royalty rates, but may sometimes grant favorable rates based on circumstances.

MOFCOM does not appear to have placed any conditions on the residual Nokia entity that retains the Advanced Technology patent licensing business. While we do not anticipate Nokia will aggressively target Chinese OEMs but rather concentrate on licensing its patents to Samsung and Apple that control half the smartphone market, it does leave the door open for Nokia to potentially license additional technology to Chinese vendors in the future.