Vancouver, Canada. November 21, 2013 — Sierra Wireless (NASDAQ: SWIR) (TSX: SW) has submitted a complaint to the European Commission (EC) against Nokia for anti-competitive behaviour, and a request for the U.S. Federal Trade Commission (FTC) to start a formal investigation.
The EC complaint says Nokia is discriminating against Sierra Wireless and abusing its dominant position as a GSM and 3G standard essential patent (SEP) holder. Sierra Wireless alleges that Nokia applies widely different, and therefore unfair, royalty rates for the same SEPs to make identical GSM wireless modules; that Nokia is imposing unfavourable and unreasonable royalty terms that put Sierra Wireless at a competitive disadvantage; and that Nokia has refused to license 3G SEPs for wireless modules, in spite of its clear obligation and repeated requests from Sierra Wireless to do so.
A Nokia spokesperson told M2M Now: “As a leader in innovation in mobile communications, Nokia has a long and successful record of contributing to wireless standards and has successfully licensed standards essential patents (SEPs) to more than 50 companies, including most of the leading mobile device vendors.
Sierra Wireless has been in breach of its existing license 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 license. Nokia regrets that Sierra Wireless is wasting the time of the European Commission, US Federal Trade Commission and ETSI with its frivolous complaints, rather than honouring its agreement with Nokia.
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.”
Sierra Wireless believes that Nokia is in breach of Article 102 of the Treaty on the Functioning of the European Union and Nokia’s obligation to grant SEP licenses on fair, reasonable and non-discriminatory terms (FRAND) as required by the European Technology Standards Institute (ETSI).
Sierra Wireless has been seeking a mutually acceptable resolution of the royalty rate issues and a licence to use Nokia’s 3G SEPs. With no clear response from Nokia, Sierra Wireless believes the best way to resolve this matter and clarify royalty discrepancies is to file a complaint with the EC. In addition, Sierra Wireless has notified the U.S. Federal Trade Commission (FTC) of the complaint and requested the FTC open an investigation into Nokia’s breach of FRAND rules and U.S. laws on fair trade and monopoly practices. The company has also requested the ETSI to investigate Nokia’s behaviour in breaching its commitment to the FRAND rule with another ETSI member.
Pierre Cosnier, senior director, Legal Affairs for Sierra Wireless said: “We are acting to protect our customers and ourselves from the unreasonable actions of some standard essential patent holders, which result in unresolved patent license disagreements that we want to remedy on fair, reasonable and non-discriminatory terms.”
Sierra Wireless is urging the EC to investigate and require Nokia to reveal the pricing for 2G and 3G SEP licences with other licensees, end the breaches outlined in the complaint, sanction Nokia, and require these patent licences to be granted on FRAND terms.
Sierra Wireless (NASDAQ: SWIR) (TSX: SW) is a machine-to-machine (M2M) devices and cloud services provider, delivering intelligent wireless solutions to simplify the connected world. It offers the industry’s most comprehensive portfolio of 2G, 3G and 4G embedded modules and gateways, integrated with its secure M2M cloud services. Customers worldwide, including OEMs, enterprises, and mobile network operators, trust our innovative solutions to get their connected products and services to market faster. Sierra Wireless has more than 850 employees globally and has R&D centres in North America, Europe and Asia.
