IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

Research in Motion loses patent dispute with Nokia

Battle with Finnish firm the latest blow for BlackBerry manufacturer

Gavel on Keyboard

Beleaguered smartphone manufacturer Research in Motion (RIM) may have to halt sales of its BlackBerry devices after losing a contract dispute with Finnish rival, Nokia.

Nokia said on Wednesday a Swedish arbitrator had ruled that "RIM was in breach of contract and is not entitled to manufacture or sell WLAN products without first agreeing royalties with Nokia."

Wireless local access network (WLAN) technologies, usually marketed under the WiFi brand, are used across BlackBerry devices and by most other smartphones.

Nokia, which is trying to boost its royalty income as its phone business slides, said it had filed cases in the United States, Britain and Canada to enforce the arbitrator's ruling.

"This could have a significant financial impact to RIM, as all BlackBerry devices support WLAN," IDC analyst Francisco Jeronimo said.

RIM declined to comment. At 6 a.m. EDT its Frankfurt-listed shares were down 5 percent at 8.245 Euros (6.66). Nokia shares were down 1.6 percent at 2.526 Euros (2.04).

"If a sales ban was imposed it would be a massive blow for RIM as it manages its transition to the new BlackBerry 10 software platform," said Canalys analyst Pete Cunningham.

However, analysts think it is much more likely that RIM will reach a royalty agreement with Nokia to avert such an outcome.

RIM, a smartphone pioneer, hopes new devices using BlackBerry 10 software, due early 2013, will rescue it from a prolonged slump in the face of competition from the likes of Apple and Samsung.

RIM promises its new devices will be faster than previous smartphones, and will have a large catalogue of applications, which are crucial to the success of any new line of smartphones.

Nokia said it signed a cross-license agreement with RIM covering standards-essential cellular patents in 2003, a deal that was amended in 2008.

RIM sought arbitration in March 2011 with the Stockholm Chamber of Commerce, arguing the license should be extended to cover WLAN patents.

The arbitration tribunal concluded a nine day hearing in September 2012 and it issued a decision on November 6, Nokia said in a US court filing seeking to enforce the ruling.

During arbitration RIM did not contest it manufactures and sells products using WLAN technology in accordance with Nokia's WLAN products, Nokia said, quoting the tribunal decision.

Nokia, along with Ericsson and Qualcomm, is among the leading patent holders in the wireless industry. Patent royalties generate annual revenue of about 500 million Euros (403 million) for Nokia.

Based on a Nortel patent sale and Google's acquisition of Motorola Mobility, some investors and analysts say Nokia's patent portfolio alone merits its current share price of around 2.50 Euros (2.01).

However, the patent market has cooled since those deals were made and industry experts say that fair value of patents in large portfolios is $100,000 (62,505) to $200,000 (125,010), pricing Nokia's portfolio at up to 0.50 Euros (40p) per share.

Featured Resources

The COO's pocket guide to enterprise-wide intelligent automation

Automating more cross-enterprise and expert work for a better value stream for customers

Free Download

Introducing IBM Security QRadar XDR

A comprehensive open solution in a crowded and confusing space

Free Download

2021 Gartner critical capabilities for data integration tools

How to identify the right tool in support of your data management solutions

Free Download

Unified endpoint management solutions 2021-22

Analysing the UEM landscape

Free Download

Recommended

Best business smartphones 2022: The top handsets from Apple, Samsung, Google and more
Mobile

Best business smartphones 2022: The top handsets from Apple, Samsung, Google and more

23 Jun 2022
Nokia wins Indosat contract to expand 5G across Indonesia
5G

Nokia wins Indosat contract to expand 5G across Indonesia

4 Mar 2022
BlackBerry revival is officially dead as OnwardMobility shuts down
Mobile Phones

BlackBerry revival is officially dead as OnwardMobility shuts down

22 Feb 2022
Nokia and Ligado partner on 4G, 5G enterprise private network
5G

Nokia and Ligado partner on 4G, 5G enterprise private network

5 Jan 2022

Most Popular

Samsung proposes 11 Texas semiconductor plants worth $191 billion
Hardware

Samsung proposes 11 Texas semiconductor plants worth $191 billion

21 Jul 2022
How to boot Windows 11 in Safe Mode
Microsoft Windows

How to boot Windows 11 in Safe Mode

29 Jul 2022
Should you take your password manager off the internet?
Sponsored

Should you take your password manager off the internet?

28 Jul 2022