Nokia said on Wednesday a Swedish arbitrator had ruled that "RIM was in breach of contract and is not entitled to manufacture or sell WLAN products without first agreeing royalties with Nokia."

Wireless local access network (WLAN) technologies, usually marketed under the WiFi brand, are used across BlackBerry devices and by most other smartphones.

Nokia, which is trying to boost its royalty income as its phone business slides, said it had filed cases in the United States, Britain and Canada to enforce the arbitrator's ruling.

"This could have a significant financial impact to RIM, as all BlackBerry devices support WLAN," IDC analyst Francisco Jeronimo said.

RIM declined to comment. At 6 a.m. EDT its Frankfurt-listed shares were down 5 per cent at 8.245 euros. Nokia shares were down 1.6 per cent at 2.526 euros.

"If a sales ban was imposed it would be a massive blow for RIM as it manages its transition to the new BlackBerry 10 software platform," said Canalys analyst Pete Cunningham.

However, analysts think it is much more likely that RIM will reach a royalty agreement with Nokia to avert such an outcome.

RIM, a smartphone pioneer, hopes new devices using BlackBerry 10 software, due early 2013, will rescue it from a prolonged slump in the face of competition from the likes of Apple and Samsung.

RIM promises its new devices will be faster than previous smartphones, and will have a large catalogue of applications, which are crucial to the success of any new line of smartphones.

By: DocMemory
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