A Swedish arbitration panel has found that Research In Motion (NASDAQ:RIMM) violated a licensing contract with Nokia (NYSE:NOK), a ruling that could potentially stop sales of the company’s mobile devices.
The arbitrator found that the BlackBerry maker is “not entitled” to make devices using wireless local access network (WLAN) technology — used to provide WiFi connectivity — that is covered by Nokia patents unless it pays the Finnish company royalties, Reuters noted.
RIM entered into arbitration with Nokia last year in Sweden. In the wake of the ruling, Nokia is asking courts in the U.K., Canada and the U.S. to halt sales of RIM devices unless a royalty deal is reached.
Since WLAN technology is used on all BlackBerrys, analysts expect RIM to quickly negotiate a deal with Nokia to prevent a sales disruption, which the company cannot afford.
Though once the dominant smartphone maker, RIM has seen its market share collapse against competition from Apple‘s (NASDAQ:AAPL) iPhone and smartphones running Google‘s (NASDAQ:GOOG) Android operating system.
RIM is betting heavily on the long-delayed launch of its next-generation BlackBerry 10 line next year.
Despite the arbitration decision, RIM shares rose 1% in Wednesday morning trading, while Nokia shares climbed almost 2%.