Patent Wars: Nokia Sues Research In Motion

by Jordan Richardson on November 29, 2012

Research In Motion just can’t catch a break. After a volleyball match with its stock prices, it looks like the latest round for the Waterloo tech company is going to involve getting swept undercurrent in yet another round of the seemingly incessant patent wars.

The BlackBerry maker is getting sued by Nokia Corp. over patents. To make matters even worse, the Finnish multinational company is hoping to ban the sale of RIM products in United States and United Kingdom markets, a hit to the pocketbook that RIM most assuredly doesn’t need right now.

Nokia and RIM have a lot in common, of course. They are both once-great tech giants and they are both struggling to find any foothold in an industry that seems to have passed them by. But while RIM seems to be at least taking a stab at new products, Nokia seems to be mostly interesting in hording its giant stable of patents and exacting lawsuits at opportune times over its contents.

Nokia has actually won an arbitration hearing in Sweden that could theoretically ban RIM from making and selling phones that use patents related to WLAN technology or even Wi-Fi. As you can imagine, those are some pretty broad pieces of technology. The inability to use WLAN or Wi-Fi in smartphones would essentially knock the phone-maker back to the proverbial Dark Ages.

RIM and Nokia have had an agreement in place since 2003 that covers “standards-essential cellular patents.” The deal was amended in 2008, but RIM apparently sought arbitration in 2011 to try to bring the deal up to speed to include WLAN patents. But in November of 2012, the arbitration tribunal ruled against RIM, subsequently finding RIM in breach of contract.

In short, as a result of the tribunal’s findings, RIM has to either pony up royalties to Nokia or not make phones with WLAN. RIM did neither, says Nokia, hence the lawsuit.

“The timing could not be worse for RIM,” said Florian Mueller, author of the Foss Patents blog. “The new version of their platform is going to bring them back to life and they would like to focus on their turnaround and not this patent lawsuit.”

RIM’s way out of this mess is to pay Nokia royalties, but the company has thus far declined comment.

“Nokia is desperate for all possible sources of revenue,” says Kris Thompson, an analyst with National Bank Financial. “It looks like if RIM loses to Nokia the cost could be $5 to $10 per smartphone, so $175- to $350-million on our 35 million handset shipments forecast next year.”

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