Telecom Lead India: Research In Motion (RIM) has lost a contract dispute over the use of Nokia patents in a case which could halt sales of its BlackBerry phones if it does not reach a deal to pay royalties to the Finnish company.
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.
It is a bad news for RIM. The Canadian smartphone maker has made an operating loss and seen falling revenues for three successive quarters, and shows no signs of making a profit in the current one, which runs to the end of November.
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.
Every BlackBerry has Wi-Fi capability, as well as standard mobile connectivity. For RIM, which is struggling with collapsing market share in western markets and among its core corporate customers, any extra expense will be unwelcome ahead of the launch of its BB10 software.
Nokia and RIM have come to loggerheads over a set of standards-essential patents (SEPs) they have licensed to each other since 2003, which let phones connect to Wi-Fi networks.
According to Nokia, Nokia and RIM agreed a cross-licence for standards-essential cellular patents in 2003, which was amended in 2008. In 2011, RIM sought arbitration, arguing that the licence extended beyond cellular essentials. In November 2012, the arbitration tribunal ruled against RIM. It found that RIM was in breach of contract and is not entitled to manufacture or sell WLAN products without first agreeing royalties with Nokia.
Meanwhile, Ericsson filed suit in the US against Samsung over what it claims is a long-standing infringement of its essential patents.
The Ericsson suit could have wide-ranging effects if its demands for a sales injunction against Samsung is granted by the US, because it would affect every Samsung device with phone capability.
Guardian reported that Ericsson’s litigation forces Samsung to argue that FRAND rates should be low, while in the dispute with Apple, it takes the opposite position. Litigation proceeds pretty quickly in the Eastern District of Texas, so there’s a good chance that Apple will be able to use in its second California lawsuit (in which several of Samsung’s counterclaim patents are wireless SEPs) some of what Samsung has to argue in its defense against Ericsson.
