According to the latest news report by Reuters, Canadian software maker and smartphone pioneer Blackberry is to pay Finnish Nokia $137 million in settlement of a payment dispute. This is in accordance with the International Court of Arbitration ruling.
According to Blackberry, the dispute was regarding certain pending payments based on a contract for patent licenses between the two companies. The company stated that the Court of Arbitration decreed that Blackberry had not made certain payments to Nokia according to the agreed contract.
According to the report in MarketWatch, Blackberry aired its unhappiness over the ruling, stating that the company was disappointed that the Court had not agreed with their arguments for the case. However, Blackberry was also quick to state that they would abide by the Court’s decision.
Blackberry stated that the lost dispute did not involve any charges of intellectual property infringements. Blackberry stated that it planned to charge Nokia with a separate patent infringement claim.
In fact, in February this year, Blackberry filed a patent infringement claim against Nokia. The company claimed that a number of Nokia’s base stations as well as software related to these stations had infringed on 11 of Blackberry’s patents. Nokia denied these claims on Friday, stating that Blackberry’s claims were “without merit”.
According to Reuters’ report, this ruling shows how strong the financial risks are that technology companies face with regard to intellectual property rights. Many of these disputes are resolved quietly, without the investors even being aware of it.
Earlier this year, Blackberry had won a similar payment dispute against Qualcomm Inc.
According to a related article by Fortune, Blackberry’s CEO, John Chen is using the company’s intellectual property to turn the company around. Blackberry has a portfolio of more than 40,000 patents and Chen is planning to generate revenue using this intellectual property by licensing them to other technology companies. In November, Blackberry also announced that it US-based Marconi Group was going to help the company with licensing out a range of their patents.
Blackberry said that the dispute payout would be recorded as a one-time charge to GAAP earnings. Nokia stated that most of the $137 million awarded has already been adjusted in the company’s financials.
Blackberry’s stocks dropped by 1.9% midday Toronto trading, while Nokia’s stocks also were down by 2% in Helsinki. Overall, Blackberry has gained 18% in the last three months. Nokia’s stocks, on the other hand, have dropped by 20% in the same time period, as compared to the S&P 500, which gained 6.9%.
Blackberry was one of the pioneers in the smartphone industry, however, it has seen 6 straight years of losses now. Under the guidance of its CEO, John Chen, the company has transitioned to become an enterprise software and services business and also is involved in the Internet of Things.
Nokia is a 152 year old company with a history of being a part of numerous industries. While it was founded as a pulp mill, since the 1990s the company moved to specializing in large-scale telecom infra as well as technology development and licensing.
At one time, Nokia was the market leader in the cell phone industry and was a part of the creation of GSM, 3G and LTE standards. Nokia sold its phone business in 2014 to concentrate on its network equipment business as well as broad patent portfolio. Currently, the Finnish company has licensed its technology to other smartphone makers such as Samsung, Xiaomi, LG and Apple. The company also sells its network equipment such as base stations and software to telecom operators.