RIM may end up owing Nokia $5 per phone

pratyush997

pratyush997

Inactive
If you thought only Apple and Samsung are the ones who are rather excited about showing up in the courtrooms around the world, think again! This time, Nokia and RIM are at it. More specifically, Finnish smartphone maker Nokia dragged Canadian firm Research in Motion, makers of the BlackBerry handsets, to court over a dispute regarding how the BlackBerry phones hook up to Wi-Fi networks. A Swedish arbitrator has ruled in favour of Nokia.

The ruling clearly states that RIM was not entitled to make or sell mobile devices which can connect to Wi-Fi networks, using technology known as WLAN or Wireless Local Access Network Systems, without first agreeing to pay royalties with Nokia.

Simply put, RIM will now have to pay royalties to Nokia for every Wi-Fi enabled BlackBerry phones ever sold. The ruling states "RIM is liable to pay royalties and damages to Nokia for its ... sales of any subscriber terminals (handsets or tablets) ... compatible with the WLAN standard. RIM has not contested that it manufactures and sells products using WLAN in accordance with Nokia's WLAN patents."

Since this ruling cannot be appealed, RIM seems to be in a rather tough spot. The company will most likely finalise a royalty agreement with Nokia, failing which, they risk an injunction order against their smartphones. Surely, RIM would want to avoid the issue spiraling out of control, with the massively important BlackBerry 10 launch looming.

However, this may be a strand of good news that Nokia was looking for. Nokia shares are already down another 1 percent, despite the expectations that the new Lumia range of smartphones will boost sales.
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*www.thinkdigit.com/Mobiles-and-PDAs/RIM-loses-patent-dispute-with-Nokia-over_11546.html
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Many of the news headlines lately have been detailing the war between Samsung and Apple. As these are the market leaders, it is understandable. Under the radar however, Nokia and Research In Motion (RIM) are embroiled in their own wireless patent battle.
Nokia have said that RIM “is not entitled to manufacture or sell products compatible with the WLAN standard without first agreeing with Nokia on the royalty to be paid for its manufacture and/or sale of subscriber terminals compatible with such standards.”

In 2003, the two companies signed an agreement. RIM are arguing that the license “should have covered patents for non-essential parts.”
Peter Misek, an analyst for Jeffries has said that a victory by Nokia would mean that RIM will end up owing between $2 and $5, for every phone, in royalty payments. RIM are not in a position right now to pay this amount of money and it would cause them some serious operational issues.
RIM have a lot riding on the release of their new Blackberry 10 operating system. If this is a success they may be able to pull themselves from the mire.
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