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RIM to pay Nokia $65 million in patent settlement

Dispute centered around whether or not Nokia's WiFi patents were included in 2003 deal

Financial trends and news by Steven Loeb
December 28, 2012 | Comments
Short URL: http://vator.tv/n/2c97

A week ago, Nokia announced that it had settled its patent disputes with Research in Motion (RIM) by entering into a new patent license agreement with the smartphone maker.

"The agreement will result in settlement of all existing patent litigation between the companies and withdrawal of pending actions in the US, UK and Canada related to a recent arbitration tribunal decision," Nokia wrote.

"The financial structure of the agreement includes a one-time payment and on-going payments, all from RIM to Nokia.  The specific terms of the agreement are confidential."

Now the details of that one-time payment have been unearthed. A filing with the Securities and Exchange Comission, first noticed by AllThingsD, reveals that RIM will be paying €50 million, or $65 million, to Nokia.

"On December 21, 2012, Nokia and RIM announced that they have entered into a new patent license agreement. The agreement will result in the settlement of all patent litigation between the companies and Nokia’s dismissal of all pending actions in the United States, United Kingdom, Canada and Germany. The financial structure of the agreement includes a lump sum €50 million (approximately $65 million) one-time payment, which has been recorded in the Company’s consolidated statement of operations in the third quarter of fiscal 2013," it says in the filing.

The dispute between the two companies involves a licensing agreement signed by the two companies in 2003, which allowed RIM to use some of Nokia's patents. RIM insisted that Nokia's Wi-Fi patents were a part of the deal, which Nokia disagreed. Nokia sued RIM, and won.

It is unclear if there will be any future payments required to be paid by RIM.

This is the second time in just six months that RIM was ordered by a judge to pay up after losing a patent battle.

In July, RIM was ordered to pay mobile-device management software maker Mformation $147 million over patents relating to RIM’s remote management system for wireless devices. That verdict was overturned in August.

A rough 2012

RIM had a very rough year.

In July, RIM shocked many with its horrendous quarterly report - as in, it was worse than it normally is.  Revenue was down 33% to $2.8 billion in Q1 from $4.2 billion the previous quarter and $4.9 billion in Q1 2012. RIM shipped 7.8 million Blackberry phones and only 260,000 Playbook tablets.  The company announced its plans to ax 5,000 employees, and the nail in the coffin: its critical Blackberry 10 smartphones won’t be released until early next year.  

After the dismal news, company stock dipped 19% in a single day. It now stands at $11.76, a far cry from its peak of $143.89 in June 2008.

The company, which once had 43% of the smartphone market share, no longer even makes the top five. A report from ad network Chitika showed that RIM devices (including the Playbook tablet) have seen a usage drop of 25% in the last year.  The devices now only account for 1% of all mobile traffic.

While CEO Thorstein Heins insisted that his company is doing fine, telling reporters, “There’s nothing wrong with the company as it exists right now,” it even came out that RIM is so strapped for cash that it is going to sell its corporate jet just to make $6 million.

RIM and Nokia could not be reached for comment.

(Image source: http://theunlockr.com)


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