HELSINKI: Canada’s Research In Motion (RIM) has lost a contract dispute over the use of Nokia patents in a case which could halt sales of its BlackBerry phones if it does not reach a deal to pay royalties to the Finnish company.

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 1100 GMT its Frankfurt-listed shares were down 5% at 8.245 euros. Nokia shares were down 1.6% 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.

Reuters