) has entered into a legal battle claiming that its patents have
been violated by rivals
Research in Motion Ltd
), HTC and Viewsonic Corp. The case has been filed in U.S. and
Germany against infringements of Nokia's dual function antennas,
power management for mobile devices and various software related
Presently, Nokia is in dire straits, losing on every front.
Nokia remains severely challenged owing to stiff competition,
) iPhone, and an array of other smartphone manufacturers using
) Android platform. In this situation if the company fails to
protect its patent portfolio, the outcome can be worse.
The company has the strongest patent portfolio in the wireless
industry and has spent almost $62 billion in the last two decades
in research and development. Nokia possesses a very strong
portfolio of around 10,000 patents.
Furthermore, the company has patent licensing agreements with
around 41 mobile handset manufacturers who can use its patents. The
company earns a healthy royalty income from this licensing
agreement. Recently, the company has lost its title as the world's
biggest mobile manufacturer to Samsung Electronics. We believe that
Nokia will fight till the end to protect its patent.
For quite some time now Nokia has been defending its patents
against other handset manufacturers. Last year, the company filed a
lawsuit against iPhone manufacturer Apple Inc. for some of its
patents which were settled after Apple agreed to pay a one-time
payment and royalty fees.
In this current round of litigation, Nokia has sued HTC for
unauthorized use of its proprietary innovations which are not
widely licensed. They have also accused California-based tablet
maker Viewsonic corp. of infringing four patents relating to 3G and
Wi-Fi technology industry standards. According to Nokia, they just
want to stop the illegal use of their proprietary technologies in
Therefore, we retain our long-term Underperform recommendation
on Nokia. Currently, Nokia has a Zacks #5 Rank, implying a
short-term Strong Sell rating.
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