Nokia accused of 'unfair' patent rates as Sierra Wireless takes 3G fight to EC

Nokia accused of 'unfair' patent rates as Sierra Wireless takes 3G fight to EC

Summary: Sierra Wireless takes its dispute with Nokia over standard essential patent royalties to Europe's competition regulator.

TOPICS: Mobility, Nokia, Patents, EU

Canadian device maker Sierra Wireless is pressing Europe's competition regulator to force Nokia to reveal the rates it uses for its standards essential 3G patents.

Sierra Wireless has accused Nokia of applying "widely different, and therefore unfair, royalty rates" for the standards essential patents (SEP) it holds for 3G and GSM technologies and wants the European Commission to force Nokia to reveal the rates it charges other licensees.

The maker of wireless and embedded devices has also accused Nokia of refusing to license 3G SEPs for wireless modules, despite, as it argues, Nokia's obligation to do so.

"Sierra Wireless is urging the EC to investigate and require Nokia to reveal the pricing for 2G and 3G SEP licenses with other licensees, end the breaches outlined in the complaint, sanction Nokia, and require these patent licenses to be granted on FRAND [fair, reasonable and non-discriminatory] terms," the company said in a statement on Thursday.  

Sierra Wireless has also requested the US Federal Trade Commission investigate. 

The complaint follows the EC's separate warnings earlier this year to Samsung and Motorola Mobility over their use of SEPs.

EC competition commissioner Joaquín Almunia fired off a warning to Google-owned Motorola Mobility over using its SEPs in litigation against Apple in Germany, saying that Motorola would violate EU competition by using its SEPs to enforce an injunction when Apple was willing to enter into a licence on FRAND terms.

A Nokia spokesperson told ZDNet that Sierra's complaints are "frivolous", and said that Nokia has licensed SEPs to more than 50 companies.

"Sierra Wireless has been in breach of its existing licence terms with Nokia for several years and, despite many years of good faith attempts by Nokia to resolve the disagreements, Sierra has failed to pay Nokia the royalties which Sierra owes under the licence. Nokia regrets that Sierra Wireless is wasting the time of the European Commission and ETSI [the European Telecommunications Standards Institute] with its frivolous complaints, rather than honouring its agreement with Nokia," they said.

"As Sierra is now pursuing these abusive tactics, seeking to continue to use Nokia's innovations without paying the agreed royalties, Nokia will take whatever steps are necessary to protect our intellectual property, our rights and our reputation."

Having sold its devices and services business to Microsoft earlier this month, patents have become an even more important part of the company's revenue stream. With a current run rate of around €500m a year for its patents business, Nokia has said in future it plans to increase the number of companies that license its patents and start licensing some patents that it had previously kept to itself. 

Further reading

Topics: Mobility, Nokia, Patents, EU

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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  • Why is it so quiet here?

    People were so vocal about the Motorola FRAND patents - I believe the song was "It's a FRAND patent, so the patent owner must license at whatever rate the buyer decides to pay at! And you agreed to this when you signed up to FRAND!"

    Well, now Nokia owns the FRAND patents. Why aren't the same people singing the same songs?
    • Because it's not the same thing.

      Motorola gave a commitment to the EU that it would license the patents they had under a FRAND style agreement. When Apple and others said they would license the patents , Motorola essentially said "no - we're suing you instead to stop the sale of your products with our IP in it", which is why The EU ruled against Motorola.

      Here it sounds like Sierra Wireless agreed to, and signed an agreement to license the patents, then decided to back out of the contract over money, maybe because they found someone else got a slightly better deal then they did, and so they haven't paid for using that IP as they promised.
      • We shall see what the EU says about this case.

        You'll have to excuse me if I discount your analysis on the grounds that you are not a lawyer, and are blatantly biased to boot.