Nokia wins key victory in RIM patent dispute

An arbitrator's ruling could allow Nokia to ban the sale of BlackBerry products around the world if RIM doesn't pay royalties on its technology.

As if its slumping market share figures aren't enough, Research In Motion has found itself in some legal trouble with Nokia.

A Swedish arbitrator has ruled that RIM is "in breach of contract and is not entitled to manufacture or sell WLAN products without first agreeing [on] royalties with Nokia." If such a royalty agreement is not made, Nokia could have the legal grounds it needs to ban the sale of any BlackBerry devices that violate its patents related to WLAN (wireless local access network) technology.

Reuters was first to report the news.

The trouble between RIM and Nokia dates all the way back to 2003 when the companies signed a licensing agreement that allowed RIM to use some of Nokia's standard-essential patents, and vice versa. In 2011, RIM sought arbitration in Sweden on the contract, requesting that Nokia's WLAN patents be included in that deal. The company reasoned that the WLAN intellectual property should be included in any agreement related to standard-essential patents.

During the arbitration process, Nokia argued that RIM's use of WLAN technology in its products violated its patents and requested that the BlackBerry maker pay it royalties. RIM did not refute that it used WLAN in its products, but reportedly believed that the use was covered under the initial contract.

According to Reuters, the arbitrator decided against RIM earlier this month, paving the way for Nokia to recently file lawsuits in the U.S., Canada, and U.K. to enforce the ruling.

For RIM, the stakes are high. If the courts uphold the arbitrator's decision and enforce it, RIM could see its products banned from sale until the company signs a licensing deal with Nokia. There's also a chance, however, that this dispute could get dragged out in courts for a while, and thus, maintain status quo.

CNET has contacted both RIM and Nokia for comment on the arbitrator's decision. We will update this story when we have more information.

 

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