Is this IoT component-level FRAND licensing? No...

Nokia and Nordic Semiconductors announced today what is said to be a "pioneering new approach" to licensing IoT SEPs. Whilst that is perhaps overstating it, the approach is certainly novel. However, what at first blush sounds like some form of component level licensing is anything but that.

The short summary is that customers of Nordic will be given the opportunity to acquire a licence to Nokia's SEPs at the point of purchase. That does not come from Nordic by way of pass-through, but is a direct licence with Nokia at the end-user device level. The only slight caveats to that are, it is understood, that the licence may be signed without Nokia's further involvement if there are no amendments, and Nordic does not need to report on which customers did not accept the licence.

There are certain efficiencies that one can see here, and some degree of increased transparency (wouldn't it be nice to see the terms). However, equally one can see some concerns. Is there scope to negotiate, bearing in mind standard terms are often just a starting point in commercial negotiations? Can Nokia say, for example, that the point of sale is when it discharged its obligation to offer a FRAND licence to any of Nordic's customers, and by extension when it can say they became aware of the need for a licence? If so, what does that mean for any interregnum between the purchase and any later negotiations direct with Nokia; is the intention that such delay falls squarely on the shoulders of the implementer? What are the consequences of that for litigation in some of the more process-oriented courts where delay can be fatal, such as Germany?

The answers to these questions will no doubt come in time, but they should certainly be part of the conversation when considering the net impact of this new approach on the SEP licensing world generally.