Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) will make the first payment of $65 million in a patent settlement dispute with Nokia Corporation (NYSE:NOK). The initial payment was disclosed in RIM's most recent 6-K filing to the U.S. Securities and Exchange Commission.
Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) and Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) settled their patent dispute on December 21st, with RIM agreeing to make a one-time payment to the Finnish company along with "ongoing payments" for the right to use Nokia's patents. The amount was not disclosed at the time of settlement.
Nokia made a case that RIM violated its patents and demanded royalties from RIM, which acknowledged the use of Nokia’s patents but claimed they believed that it was covered by the contract signed in 2003. Last month the arbitrator ruled in Nokia’s favor, which likely led to this agreement.
As per the filing, the new patent license agreement brings an end to all of the patent litigation between the companies. As a result Nokia dismissed all pending actions in the United States, United Kingdom, Canada and Germany.
In a filing with the Securities and Exchange Commission uncovered by The Guardian, some light has been shed on those terms.
“On December 21, 2012, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) and Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) announced that they have entered into a new patent license agreement,” RIM noted in a 6-K filing with the SEC. “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 of EUR50m (approximately $65m) one-time payment, which has been recorded in the Company’s consolidated statement of operations in the third quarter of fiscal 2013.”
The settlement amount of 50 million euros (approximately $65 million) was identified in RIM's consolidated statement of operations for the third quarter of its fiscal 2013. RIM posted the quarterly results on December 20, with a profit of $14 million, RIM’s revenue declined by nearly half to $2.72 billion as it lost 1 million customers. The company is hoping to win back the lost glory in 2013 with the long-anticipated arrival of its BlackBerry 10 operating system in late January.