Nokia Seeks Ban on Sale of RIM Products in Patent Licensing Dispute
Call it the battle of the second-tier smartphone players. In the shadow of the Android-iPhone duopoly, Nokia, which has hitched its wagon to Microsoft's Windows Phone to gain some traction, is suing struggling BlackBerry maker Research In Motion over patent royalties it believes are due, and petitioned the U.S. District Court in San Jose, Calif., to block sale of RIM's devices that use the disputed technology.
The two companies signed an agreement over wireless local access network technology patents in 2003, but RIM later decided that the agreement should cover "non-essential" technology for devices as well. Nokia disagreed, and RIM went to the Arbitration Institute of the Stockholm Chamber of Commerce in March 2011 for arbitration.
The chamber ruled in Nokia's favor, and now the Finnish handset giant is looking to courts in the U.S., Britain and Canada to force RIM to pay royalties, if it can convince courts in those countries they have jurisdiction to enforce the ruling. It's a battle RIM can ill-afford to fight as it struggles to regain market share lost to Google's Android devices, the top platform, and Apple, whose iPhone is the single most popular device in the world.
Since the stakes in this battle are high -- Nokia needs the revenue and RIM can't afford to have its devices banned -- a settlement is considered likely.
It's the latest in a slew of litigation between tech giants, echoing one fought between Apple and Samsung, the top overall device maker, over patents, which has seen wins by Apple but continues to be litigated. Google and maker Oracle also fought a prolonged battle over patents related to Android, which was won by Google.
"The industry goes through this cycle about once a decade or so," said tech consultant Rob Enderle of the Enderle Group. "What this does is eventually force cross licenses that the firms can use for mutual defense and the activity dies down. RIM should have enough intellectual property of their own to push this to cross license."
Enderle suspects such battles are intended to "pool resources without getting in trouble for collusion. As part of a litigation settlement a cross license isn't typically challenged but if the firms pool resources it can have antitrust implications."
All's Well that Ends Well
Enderle told us another reason for such litigation is when a company CEO wants to "mine the patents" in order to boost revenues when sales aren't what they could be. "But whatever the cause," he said, "this typically ends up in cross licenses because none of these firms are expert at litigation and a few weeks of deposition can cool any executive's interest in this practice."
RIM spokeswoman Crystal Roberts told The Associated Press that the company "will respond to Nokia's petitions in due course. Research In Motion has worked hard to develop its leading-edge BlackBerry technology and has built an industry-leading intellectual property portfolio of its own."