After Apple (AAPL) and Samsung, it is Nokia's (NOK) turn to engage in patent wars. The Finnish handset maker has sued rivals HTC and Research In Motion (RIMM) on multiple counts of patent infringement at several courts in the U.S. and Germany.

Nokia has alleged that the two companies, along with visual technology company Viewsonic Corp, have infringed on some 45 patents in all.

With its mobile phone sales flagging as Apple and Samsung run away with the smartphone market, Nokia is relying on its patents to draw in some licensing revenues and mitigate the impact of what is likely to be long and painful Windows Phone transition process.

We have a $5 price estimate for Nokia's stock, about 40% ahead of the current market price.

Nokia flexes its patent muscle

Nokia has a very strong patent portfolio, comprising over 30,000 patents and around 10,000 patented innovations. It already earns a steady royalty income from its patents, which it has licensed to multiple mobile handset makers around the world. The company reported in its Q1 earnings that it stands to earn $500 million from its intellectual property related license deals every year at the current run rate.

Last year, the company filed a lawsuit against iPhone manufacturer Apple for some of its patents, which were settled after the latter agreed to pay a one-time payment and recurring royalty fees.

However, Nokia has not been a major litigator in the past, unlike Apple, Samsung and Motorola, which have been suing each other for quite some time now. Nokia, on the other hand, has maintained a pretty low profile in such matters, focusing instead on developing and marketing its Lumia smartphones globally.

Patent licensing could cushion short-term losses

But with Lumia sales slow to gain strength and Nokia's Symbian sales, primarily in emerging markets, dropping fast, the company is looking for alternate ways to boost revenues while still staying the course for the planned transition.

Nokia's recently announced Q1 results showed that the Lumia is being received well by both carriers and consumers alike, with sales doubling over the previous quarter. However, that was not enough to cover the losses the company sustained on the Symbian front. (see Nokia's Earnings Show Pricing Pressures And Slow Windows Phone Transition)

The company's overall mobile phones sales dropped 24% over Q1 2011, as Samsung raced ahead to become the largest handset maker in the world breaking Nokia's 14 year old reign at the top.

With net losses posted in the first quarter and the outlook bleak for the next few quarters, Nokia needs any financial boost it can get. This could also be the start of many more lawsuits to come in the future.

Although any financial settlement from the lawsuits filed could be, at best, months away, Nokia is willing to take any victory that falls its way in this uphill battle that it faces in the smartphone market.

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