Telecom Lead America: The settlement of patent litigation between Nokia and Research In Motion (RIM) will result into payout of funds by the BlackBerry maker to the struggling Finnish phone major.
Analysts say settlement is the right step for the BlackBerry maker Research In Motion (RIM) which is hoping to revive its fortune after January 30 — when it will officially launch BlackBerry 10.
RIM is unlikely to become financially strong soon. The smartphone major did not have new products in the last two quarters — that affected its revenue performance. If BlackBerry 10 does not take off well, it will court more troubles.
In Q3 for the three months ended December 1, 2012, RIM’s revenue was $2.7 billion, down 5 percent from $2.9 billion in the previous quarter and down 47 percent from $5.2 billion in the same quarter of fiscal 2012.
Last week, Research In Motion CEO Thorsten Heins said timing of BlackBerry 10 launch event on January 30, 2013 may impact sales of current BlackBerry 7 products as some customers may defer purchasing decisions.
The new patent license agreement will result in settlement of all existing patent litigation between the companies and withdrawal of pending actions in the US, UK and Canada related to a recent arbitration tribunal decision.
Nokia said the financial structure of the agreement includes a one-time payment and on-going payments, all from RIM to Nokia.
Both RIM and Nokia did not share the specific terms of the agreement.
One year ago, Apple ended its patent dispute with Nokia. While the exact settlement terms were not disclosed, Nokia said that it would receive a one-time payment plus a lifetime of royalties from various Apple products. Considering the large number of iDevices that Apple sells every year, this settlement could be worth billions to Nokia.
During the last two decades, Nokia has invested approximately EUR 45 billion in research and development. Nokia has around 10,000 patent families.
“We are very pleased to have resolved our patent licensing issues with RIM and reached this new agreement, while maintaining Nokia’s ability to protect our unique product differentiation,” said Paul Melin, chief intellectual property officer at Nokia. “This agreement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.”