Nokia to sell 500 wireless patents to US mobile ringtone firm Vringo for $22 mn

Struggling mobile handset maker Nokia is selling around 500 wireless patents to US mobile ringtone company Vringo Inc in a $22 million deal in order to boost its cash reserves.

The sale comes on the same day it agreed to sell its Qt software business to Finnish IT services firm Digia Oyj for a fraction of the $153 million it had paid for acquiring it in 2008. (See: Nokia to sell its Qt software business to Finnish IT services firm Digia Oyj)

New York-based Vringo said it had entered into a patent purchase agreement with Nokia where the Espoo, Finland-based company agreed to sell a portfolio of over 500 patents and patent applications worldwide, including 109 issued US patents.

Vringo will pay Nokia $22 million for the patents, and should the patents bring in revenues of more than the sale amount, Vringo will make a further payment of 35 per cent of the income.

The portfolio encompasses a broad range of technologies relating to cellular infrastructure, including communication management, data and signal transmission, mobility management, radio resources management and services.

Thirty-one of the 124 patents have been declared essential by Nokia to wireless communications standards that are commonly known as 2G, 2.5G, 3G and 4G and related technologies and include GSM, WCDMA, T63, T64, DECT, IETF, LTE, SAE, and OMA.

In June, Nokia's chief financial officer Timo Ihamuotila had said that the company is prepared to divest part of its vast portfolio of patents to raise much-needed cash since its current €4.9 billion cash reserves are likely to dwindle soon due to its restructuring.