Nokia Oyj (NOK) - Get Report shares rose the most in nearly three years Tuesday after the group said it had settled an intellectual dispute with Apple Inc. (AAPL) - Get Report and simultaneously signed a multi-year patent license agreement.
The deal will allow the Epsoo, Finland-based networking group to provide infrastructure products to Apple, the company said, while Apple will resume the use of Nokia digital health products, which were formally offered under the Withings brand, in its online and retail stores. Nokia will also receive an undisclosed cash payment from Apple.
"This is a meaningful agreement between Nokia and Apple," said Nokia's chief legal officer Maria Varsellona. "It moves our relationship with Apple from being adversaries in court to business partners working for the benefit of our customers."
Nokia shares rose 7% higher in early Paris trading, the biggest single-day increase since July 2014, and were trading about 6% higher to $6.57 in early trading on the New York Stock Exchange.
Last month, Nokia said it was "cautiously optimistic" for the full year even as sales in the first three months of the year slowed to €5.4 billion ($6.1 billion), down 3.6% from the same period in 2016. Operating profits, however, came in slightly better-than-expected at €341 million and the group reiterated its full-year outlook, thanks in part to an improvement in its gross margin, which measures the share of revenues that remain after production costs are stripped away.
Nokia filed its first patent infringement case against Apple in 2009, saying at the time that "the basic principle in the mobile industry is that those companies who contribute technology development to establish standards create intellectual property, which others then need to compensate for."
The most recent suits were filed in December of last year and accused the Cupertino-California-based group of violating 32 patents linked to display, software, video encoding and user interface technologies.
"Since agreeing a license covering some patents from the Nokia Technologies portfolio in 2011, Apple has declined subsequent offers made by Nokia to license other of its patented inventions which are used by many of Apple's products," the company said at the time.
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