Bloomberg News

Nokia Devices Infringe IPCom Phone Patent, U.K. Judge Rules

June 16, 2011

(Closes share price in seventh paragraph.)

June 16 (Bloomberg) -- Nokia Oyj, the world’s biggest maker of mobile phones by volume, lost a U.K. court bid to invalidate a European patent that Germany’s IPCom GmbH & Co. claims is vital to the Finnish company’s handset sales.

The patent, which covers technology for connecting a handset to a network, is valid and infringed by two Nokia devices, which Judge Christopher Floyd didn’t identify in his ruling today at the High Court in London. Nokia’s shares fell as much as 3.3 percent to a 13-year low in Helsinki trading.

“As far as we know, this is the first time that an essential telecoms 3G patent was ever upheld and judged infringed in the U.K., a jurisdiction well-known for being very demanding for patent holders,” Bernhard Frohwitter, IPCom’s managing director, said in a statement.

The ruling comes two days after Nokia won an almost two- year patent dispute with Apple Inc., in a settlement that awards a one-time payment to and royalties to the Espoo, Finland-based handset maker. Nokia’s dispute with IPCom is being played out in courts in the U.S., Germany, Japan and Italy.

IPCom, which says the ruling threatens Nokia’s U.K. sales, seeks royalties from a family of mobile-technology patents it acquired in 2007 from Robert Bosch GmbH, the world’s largest automotive supplier. IPCom bought the patents after Bosch failed to license them to Nokia in 2003.

Shares Fell

The patent at issue in today’s case wasn’t infringed by a third Nokia device, Floyd ruled today.

Nokia’s shares fell 1.3 percent to 4.14 euros at 4:30 p.m., extending their slide so far this year to 46.5 percent.

Mark Durrant, a spokesman for Nokia, said the company’s current devices don’t infringe the patent. The company will appeal part of today’s judgment, he said.

“We are pleased that the U.K. High Court declared that Nokia’s current products do not infringe the patent,” Durrant said in an e-mail. “This means that we can continue selling those products, now with legal certainty.”

IPCom rejected Nokia’s interpretation of the ruling, claiming the two infringing devices are still in use by the Finnish company.

“Nokia is clearly misleading the public on what the court ruled today,” Frohwitter said today in a phone interview. “IPCom is ready to enforce the U.K. ruling.”

Apple Deal

Today’s ruling is “minor in comparison to the Apple patent arrangement announced this week,” said Sami Sarkamies, a Helsinki-based analyst at Nordea Bank AB. “It’s one country, one patent. It’s probably not the end of the world.”

Nokia rose as much as 4.1 percent after the deal with Apple was announced June 14.

Nokia in January won a U.K. appeals court ruling that invalidated the “parent” patent for the patent in today’s ruling. A new patent was split off from the parent and asserted against Nokia separately.

In the earlier ruling, the justices ruled IPCom had abused the court process by failing to make its case fast enough. The patent-holding company had earlier agreed to revoke 13 other patents in four related U.K. cases.

Nokia in March said it won a court challenge invalidating the German portion of a European patent related to predictive text messaging. IPCom, based in Pullach, Germany, said at the time the patent wasn’t “essential” to its overall litigation with Nokia.

--With assistance from Karin Matussek in Berlin and Diana Ben- Aaron in Helsinki. Editors: Christopher Scinta, Peter Chapman

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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