In a first for the company, Europe's Nokia Corporation (ADR)(NYSE:NOK) is trying to get devices of Research In Motion Limited (NASDAQ:RIMM) banned in certain countries such as the United States, United Kingdom and Canada on an alleged patents violation.
Nokia has always been a friendly company, maintaining good relations with its competitors and rivals. It rarely takes companies to court, using the legal route only as a last resort and usually prefers to settle patents disputes with royalty payments.
Nokia has spent a good deal of money (about $40 billion, according to reports) in the last ten years building formidable portfolio of patents, many of which are used in the development of wireless phones and tablets. As many as 40 companies pay Nokia a royalty for the use of those patents.
So this pursuit of RIM comes as something of a surprise.
Incidentally Blackberry devices made by RIM, use WiFi technology known as WLAN, which Nokia has patented.
The Finnish handset maker was able to get an arbitration ruling in its favour in a Swedish court and its current action appears to be related to that.
According to the arbitration award, Nokia will receive a royalty payment from RIM for every phone the Canadian firm sells. In fact if it does not pay the royalty to Nokia it will not be able to produce phones with the WLAN technology, the patent for which is held by Nokia.
In 2003, both companies had signed a contract, which enabled RIM to use the technology for its WiFi networks.
If Nokia succeeds in banning RIM's devices, it will hit the company hard as it is struggling for survival and is on the verge of releasing its new operating system Blackberry 10, that is generating positive response from network carriers and the tech world in general.