Sierra Wireless (NASDAQ:SWIR) (TSX:SW) today announced it has submitted a complaint with the European Commission (EC) against Nokia for anti-competitive behavior 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 unfavorable 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.
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 license 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.”