Exclusive: Nokia seeks to block sale of some RIM products

Nokia wants a US court to enforce an arbitration agreement that could affect most of RIM's smartphones

Nokia has asked a California court to enforce an arbitration award that would prevent Research In Motion from selling products with wireless LAN capabilities until the companies can agree on patent royalty rates.

Nokia and RIM both declined to comment on Nokia's request, a copy of which was obtained by IDG News Service, but such a filing is typically made after two parties settle a dispute through arbitration but one party does not follow through on the agreement.

The arbitration took place over nine days in September at the Stockholm Chamber of Commerce in Sweden, which acts as a neutral arbiter in commercial disputes. Before arbitration can begin, both sides agree to be bound by the findings.

Among the conclusions, according to Nokia's petition, is that RIM "is not entitled to manufacture or sell products compatible with the WLAN standard without first agreeing with Nokia on the royalty to be paid for its manufacture and/or sale of subscriber terminals compatible with such standards."

Most of RIM's phones implement the 802.11 wireless LAN standard.

The two companies have yet to reach such an agreement, Nokia said in its petition, which was filed Monday at the U.S. District Court in San Jose.

"RIM and its U.S. subsidiary RIM Corporation nevertheless continue to violate the award and breach the underlying agreement, through actions including but not limited to the unauthorized manufacture and sale of WLAN products within this district [Northern California] and throughout the United States."

Nokia is asking the court to confirm the arbitration award, and argues that the U.S., Finland, Canada and Sweden are all signatories to the 1958 New York Convention governing international arbitration.

The dispute stems from an agreement dating back to 2003, in which RIM licensed patents from Nokia related to wireless devices. The agreement itself is not included in the petition, but the fight between the companies concerns the patents it covers.

RIM later found itself pursued by MobileMedia Ideas LLC for the unauthorized use of patents. MMI is a Delaware-based company set up by Nokia, Sony and MPEG LA to manage intellectual property contributed by Nokia and Sony.

RIM contends that the patents in question were covered by its earlier deal with Nokia, and argued as proof that Nokia never sought to enforce them until they were divested to MMI.

However, the arbitration tribunal determined they were not covered by the 2003 agreement.

"The tribunal concludes that Nokia ... intended to license out to RIM more than essential patents. It has not been demonstrated that a possible assumption on RIM's side that the agreements had a wider scope was made clear to Nokia or that Nokia ought otherwise to have known about such an assumption," the tribunal said in its opinion.

The patents in question are U.S. patents 5,479,476, which covers user-adjustable modes for phones; 5,845,219, which covers call alert during silent mode; 6,049,796, which covers real-time search on a personal digital assistant; 6,055,439, which covers a cellphone user interface; 6,253,075, which covers call rejection; and 6,427,078, which covers a small, handheld workstation.

The petition is case 12-5992 filed at the U.S. District Court for the Northern District of California in San Jose.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

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Martyn Williams

IDG News Service
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