Following Nokia's request to have BlackBerry handsets banned, a judge has ruled that RIM owes the former license fees for every Wi-Fi enabled smartphone it sold.
An arbitration proceeding sought to extend a 2003 patent deal between the two financially struggling companies to include devices with Wi-Fi support. Ultimately, the ruling favored Nokia.
"RIM is liable to pay royalties and damages to Nokia for its ... sales of any subscriber terminals (handsets or tablets) ... compatible with the WLAN standard," the ruling stated. "RIM has not contested that it manufactures and sells products using WLAN in accordance with Nokia's WLAN patents."
The ruling itself can't be appealed; essentially, Research in Motion has no other option but to reach a royalty agreement with Nokia, or risk an injunction being applied against all its products.
BlackBerry's creator had previously argued that an earlier licensing deal should cover the Wi-Fi patent, with the Stockholm Chamber of Commerce, who is mediating the discussions, disagreeing with that notion.
"This could have a significant financial impact to RIM, as all BlackBerry devices support WLAN," IDC analyst Francisco Jeronimo said. "The arbitration decision is not appealable and the U.S. Court can be expected to enforce the judgment by issuing an injunction against RIM, which would effectively put RIM out of business," added Alexander Poltorak, chief executive of patent consultancy General Patent Corp.
"RIM has only one choice now - to license Nokia's patents," Poltorak said. "It should be a quick process. No substantive issue will be re-litigated. The U.S. court merely needs to enforce the verdict of the Swedish arbitration tribunal."
Nokia's court win over its rival comes at an inopportune time for RIM, who is already making losses within every quarter. It's also a few months away from releasing what it hopes to turn its fortunes around with the oft-delayed BlackBerry 10 mobile operating system.