(MENAFN - ProactiveInvestors - Australia) Smartphone maker Research In Motion (NASDAQ:RIMM)(TSE:RIM) has lost a European contract dispute over the use of Nokia (NYSE:NOK) patents.
The case could halt sales of RIM's BlackBerry phones if it does not reach a deal to pay royalties to the Finland-based Nokia.
Nokia said Wednesday that a Swedish arbitrator had ruled that RIM was "in breach of contract" and was "not entitled" to manufacture or sell WLAN products without first agreeing royalties with Nokia.
Nokia, which is trying to increase its royalty income as its phone business slips, said it had filed cases in the U.S., U.K. and Canada to enforce the arbitrator's ruling.
Wireless local access network (WLAN) technologies are used across BlackBerry devices and by most other smartphones.
RIM declined to comment to the press.
Wednesday afternoon, RIM shares were up 4.29 per cent to 11.17 while Nokia shares were up 4 per cent to 3.30.
RIM hopes new devices using BlackBerry 10 software, due early 2013, will rescue it from a prolonged slump as from competitors such as Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG).
Nokia said it signed a cross-license agreement with RIM covering standards-essential cellular patents in 2003, a deal that was amended in 2008. RIM was seeking arbitration in March 2011 with the Stockholm Chamber of Commerce, arguing the licence should be extended to cover WLAN patents.
The arbitration tribunal concluded in September 2012 and it issued a decision on November 6, Nokia said in a court filing.
During arbitration RIM did not contest it manufactures and sells products using WLAN technology in accordance with Nokia's WLAN products, Nokia said, quoting the tribunal decision.
Nokia, along with Sweden's Ericsson and Qualcomm (NASDAQ:QCOM), is among the leading patent holders in the wireless industry.