Research in Motion (RIM) of Canada has lost a recent patent battle against Nokia, the Finnish phone manufacturer. Nokia apparently is aiming to increase its patent royalties in order to meet its expenses. Nokia’s smartphone business slid with setback since Apple and Android started dominating the market. In the stock market, Nokia’s shares reached an all-time low in 2012, Nokia shares were down 1.6 percent at 2.526 euros.
Blackberry on the other hand has been struggling with the same woes as its shares also have gone down as compared to the once very popular device range that it used to carry; its Frankfurt-listed shares were down 5 percent at 8.245 euros. It can spell disaster for the company if, by any chance, Nokia seeks to ban sales of devices. The dispute is over a series of WLAN (wireless LAN) patents that entitle Nokia to be the innovator of these technologies. Blackberry has been accused by Nokia to violate a cross license agreement which has now been ruled in the form of a halt on the manufacture and sales of devices which can connect to a wireless network unless RIM pays royalties to Nokia.
Both the companies have been involved in patent battles before though Nokia’s record has been higher than Blackberry, which was involved in the 2000 NTP infringement battle. Nokia, along with Ericsson and Qualcomm holds a large number of wireless patents and earns a good deal of its operations money from patent royalties. Patent royalties generate annual revenue of about 500 million euros ($646 million) for Nokia. Previous cases of patent battle for Nokia include Apple (which had its own ground breaking episode of patent battle against the Korean Samsung), in which Apple first fought but then agreed to settle for an unknown amount. Nokia, with another strategic move took the battle to HTC and ViewSonic in Germany courts.
The patent lawsuits may be a good source of income for the companies holding the rights to rule technology space and demand royalties, which is rather justified given the amount of hard work and USPTO rules but this creates and unfair situation as far as customers are concerned. Simply put, less competition means monopoly and less choices and higher prices. Now that can’t be a favorable situation. Also, it hinders innovation to some level and incites fear into the mind of independent developer.
Image Courtesy | theunlockr