Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) and Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) have finally settled all of the patent disputes between the companies, but it came at quite a high price for RIM. Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) announced the deal it made with Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) in which RIM will pay Nokia an undisclosed amount one time and then make future payments to use the company’s patents.
Investors are already responding to news of the deal. Shares of Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) have plummeted on the news of this agreement. They’re down more than 15 percent and still falling in early morning trades, obliterating the gains RIM’s stock made on last night’s better-than-expected earnings report and even erasing a large chunk of the gains the stock has made in the last month.
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CNET reports that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) and Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) have been battling each other in court since 2003 when the two companies signed an agreement that allowed both of them to each other’s patents. Then in 2011 RIM brought a lawsuit against Nokia in Sweden in an attempt to get the company’s patents for WLAN technology included in that original deal.
However 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.
ABC News reports that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) also sued RIM in November in the U.K., Canada and the U.S., this time in connection with the patents that were covered by the agreement in 2003. Both companies have reportedly agreed to end all global arbitration as a result of this latest agreement, so the suits in the U.K., Canada and the U.S. will likely be dropped.