RIM To Pay Nokia For Wi-Fi Patents

RIM has agreed to pay Nokia royalties to end patent litigation between the two struggling smartphone makers.

Nokia had sued Blackberry-maker RIM over the use of Wi-Fi technology in RIM’s phones, but the two have now agreed to end all patent lawsuits. Nokia is still suing other companies, and observers expect it to go after Android phone makers next, having already settled with Apple.

RIM backs down

“The announcement is unambiguous that money is flowing from Canada to Finland, and only in that direction,” said patent commentator Florian Mueller. “Once again, Nokia emerges the definitive winner of a patent dispute, as it did against Apple in June 2011.”

RIM had no option but to pay up after the Finnish phone giant won victory in a Swedish court.  The terms of the deal have not been disclosed, but involve a one-off payment and on-going royalties, and an agreement to play nicely in future.

Last year, it won a two-year dispute with Apple, which involved 40 patents, with an agreement to end patent squabbles between the two companies.

Nokia is still pursuing HTC and ViewSonic, who were named in the original lawsuit, and Mueller believes this may be the start of a bigger campaign to get royalties from the Android ecosystem. The company is already gunning for Google’s Nexus 7, made by Asus,

“Google clearly takes Nokia’s patents very seriously,” said Mueller. “It is an intervenor in the ITC investigation of Nokia’s complaint against HTC, and in at least four German Nokia lawsuits (over Google Play and Google Talk), and Google’s director of litigation personally flew to Germany to attend a couple of court hearings and a trial.”

Relying on patent revenues is a further sign of Nokia’s decline in making actual phones, where it has lost its number one spot to Samsung. Nokia recently sold its headquarters in Espoo, Finland, to raise money.

And RIM is struggling while it waits to deliver its next operating system, BB10. Like Nokia, it is blessed with a strong hand in patents, and Mueller expects it to play it more strongly: “RIM definitely needs the money and large shareholders probably pressure management to monetize its patent portfolio,” said Mueller. “By collecting royalties from even weaker rivals, RIM could refinance some if not all of the costs of the Nokia deal.”

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