Nokia faces US and European competition claims
A Canadian wireless communications company has urged the European Commission and US Federal Trade Commission (FTC) to investigate Nokia for alleged competition breaches.
The claims, filed by Sierra Wireless, relate to Nokia’s standard essential patents (SEPs) covering the GSM (2G) and 3G standards.
Sierra makes modules that are used when two “machines”, for example a bank and a payment terminal, communicate.
It licenses all of Nokia’s SEPs directed to 2G, but claims the Finnish company applies widely different royalty rates to different licensees, meaning the SEPs are not licensed on fair, reasonable and non-discriminatory (FRAND) grounds.
"The difference is huge,” Pierre Cosnier, Sierra’s senior director for legal affairs, told WIPR, adding that the company “strongly suspects” that some competitors receive more favourable licences than Sierra, while others don’t even pay a licence.
Sierra has been a Nokia licensee for about 10 years, Cosnier said, but became suspicious about Nokia’s royalty rates when Sierra acquired French competitor Wavecom, which licensed the same 2G technology from Nokia, in 2009.
“Both licensing agreements were radically different,” Cosnier explained, though he could not provide further information on pricing for confidentiality reasons.
According to Cosnier, Sierra wants the commission to reveal Nokia’s pricing and force it to license the 2G patents on FRAND terms.
“We hope the commission is going to sanction Nokia, but we also request them [Nokia] to comply with the FRAND rules.
“We also want Nokia to grant us a licence for the 3G patents,” he added. “We don’t understand why we don’t have a licence for the 3G modules.”
Sierra claims Nokia has so far refused it a licence to patents reading on 3G technology used in modules “in spite of its clear obligation and repeated requests to do so”.
The company has also asked ETSI, the standard-setting body for 2G and 3G, to investigate Nokia.
The claims filed with the commission and FTC, on November 8, are similar but not identical, Cosnier explained, because the rules Nokia is alleged to have breached in Europe and the US are slightly different.
A Nokia spokesman told WIPR that Sierra has been in breach of its existing licence terms (for 2G) 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”.
Cosnier rejected the claims, however.
“I’m not at all surprised by that statement. They are simplifying the debate – we have been paying royalties. The real question is which is the right rate and, second, which of these two rates is FRAND?”
The Nokia statement continued: “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.”
