Nokia Drops Litigation After RIM Agrees to Pay Up

RIM and Nokia reached a new patent-licensing agreement. Consequently, Nokia has retracted the complaints it filed with courts in three countries.

Nokia and BlackBerry maker Research In Motion have, if a little belatedly, reached a new patent-licensing agreement.

On Nov. 29, Nokia filed documents with courts in the United States, the United Kingdom and Canada, asking them to bar sales of BlackBerry devices until RIM entered into new licensing agreements. The patents Nokia said RIM was infringing are relevant to 802.11 wireless LAN technology.

A happier Nokia announced Dec. 21 that it had entered into a new agreement with RIM that "will result in settlement of all existing patent litigation between the companies and withdrawal of pending actions in the U.S., U.K. and Canada related to a recent arbitration tribunal decision."

In 2003 and 2008, RIM had signed agreements to license the patents from Nokia, but as the date to refresh the deal approached, RIM was unhappy with the terms. The pair sought the assistance of Sweden's Stockholm Chamber of Commerce, a neutral body that acts as an arbitrator, but after nine days, they still had not reached mutually agreeable terms.

"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 to royalties with Nokia," Nokia said in a statement to eWEEK, after filing its documents with the courts. "In order to enforce the Tribunal's ruling, we have now filed actions in the U.S., U.K. and Canada with the aim of ending RIM's breach of contract."

A RIM spokesperson told eWEEK Nov. 28, "Research In Motion has worked hard to develop its leading-edge BlackBerry technology and has build an industry-leading intellectual-property portfolio of its own. RIM will respond to Nokia's petitions in due course."

It was widely expected that RIM would respond to Nokia sooner—and certainly before its scheduled Jan. 30 launch of BlackBerry 10, the new mobile platform RIM is counting on to turn the company around. On Dec. 20, RIM announced the results of its fiscal 2013 third quarter, which included smartphone sales that were down 47 percent from a year earlier.

Nokia has been having its own problems. In October it posted a third-quarter loss of $1.3 billion. It currently earns about $659 million on royalties from patents and has promised shareholders it will do a better job of making use of its portfolio, which is one of the largest in the industry.

"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," Paul Melin, Nokia's chief intellectual-property officer, said in the statement announcing the new deal. "This agreement demonstrates Nokia's industry-leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market."

Nokia officials added that the agreement includes a one-time payment and ongoing payments by RIM, but otherwise said that the terms of the deal are confidential.