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Another suit but this time it’s not AAPL but Nokia against RIMM

Nokia Corporation (ADR) (NYSE:NOK)  filed a suit against Research In Motion Limited (USA) (NASDAQ:RIMM)  for patent infringement in Britain, U.S and Canada.15 months ago it settled all its lawsuits with Apple for licensing and now it’s the time with Research In Motion Limited (USA) (NASDAQ:RIMM).

In early 2003 Research In Motion Limited (USA) (NASDAQ:RIMM) was entered into a contract with Nokia Corporation (ADR) (NYSE:NOK) for any patent right which permit it to use some standard industry technology required for the production of mobile devices. For that Nokia Corporation (ADR) (NYSE:NOK) was receiving a pretty good amount of royalty. But now Research In Motion Limited (USA) (NASDAQ:RIMM) started using the patent of WI-Fi compatible product manufacturing technology without the knowledge of Nokia. The maker of BlackBerry did not intend settle the license fees with Nokia Corporation (ADR) (NYSE:NOK) and refused to pay any royalty. So the patent infringement case will be filed on Research In Motion Limited (USA) (NASDAQ:RIMM) by Nokia Corporation (ADR) (NYSE:NOK).

Research In Motion Limited (USA) (NASDAQ:RIMM) declined to pay anything for Nokia’s accusation and made it very clear that the WI-Fi technology which they use is coming under the existing license contract and they are not liable to pay anything extra for that.

Nokia Corporation (ADR) (NYSE:NOK) going to the last extent, now file a suit against Research In Motion Limited (USA) (NASDAQ:RIMM) which does not permit to sale its WI-Fi compatible product without settling the royalty issue with Nokia Corporation (ADR) (NYSE:NOK).

Research In Motion Limited (USA) (NASDAQ:RIMM) is now at a ‘do’ or ‘die’ situation. Now it has to pay extra $2 to $5 as royalty license fees per phone to Nokia Corporation (ADR) (NYSE:NOK) or else it has to sell its product without WI-Fi enabled technology, which will ultimately reduce the demand and the sale price of the product. And in long-run its credit rating and goodwill will also be hampered by the action.

Nokia Corporation (ADR) (NYSE:NOK) has spent near about $62 billion on patent rights. It has a licensing contract with 41 mobile making companies using Nokia Corporation (ADR) (NYSE:NOK)’s patented technology for their devices. It becomes a great source of income for Nokia Corporation (ADR) (NYSE:NOK) to collect Royalty from the licensing business.

In both the cases Nokia Corporation (ADR) (NYSE:NOK) will get benefited. If Research In Motion Limited (USA) (NASDAQ:RIMM) is going ahead with the given proposal it will start paying the Royalty fee. And if not then Nokia Corporation (ADR) (NYSE:NOK) will gain control over some BlackBerry customer needing WI-Fi enabled phone.

Share Value Of The Following:

Nokia Corporation (ADR) (NYSE:NOK) was up by 1.53% to close at $3.32.

Research In Motion Limited (USA) (NASDAQ:RIMM) were up by 3.96% to close at $11.54.

Published by Viraj Shah

Viraj Shah has done M.Com (Finance) and currently pursuing CFP. He is a technical analyst who tracks US markets along with other global markets like India very closely. He is very passionate about stocks and believes that money can always be made in market.

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