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IPO-bound Reddit admits patent infringement lawsuit from Nokia

Reddit software is displayed on a smartphone in this image shot, July 13, 2021

March 19 (mod1s) - Reddit is considering a letter from Nokia Technologies (NOKIA.HE), opens new tab saying it breached several of the telecom and cloud network firm's patents, the social media platform said on Tuesday, ahead of its high-profile initial public offering (IPO) this week. 

The announcement followed a probe by the Federal Trade Commission centered on Reddit's selling, licensing and sharing of user-generated information with third parties to train artificial intelligence models.

"Nokia is seeking compensation for the use of (its) key inventions and will reinvest the royalties in the development of next-generation communication and multimedia technologies," the firm said in a statement. 

Reddit, which has been embroiled in patent infringement lawsuits in the past, is aiming a value of up to $6.5 billion for its IPO in one of the most-anticipated share sales in recent years.

"As we face increasing competition and become increasingly high profile, the possibility of receiving more intellectual property claims against us grows," Reddit cautioned in its statement. 

Patent conflicts are frequent among social media organizations, but most of them are settled without a trial, said Michael Parks, partner at legal firm Thompson Coburn LLP. 

Reddit's issue with Nokia has not yet resulted to a lawsuit, although the Finnish corporation has already been engaged in some important patent battles.

Reddit's IPO is between four and five times oversubscribed, Reuters reported on Sunday, making it more likely to hit its goal value. It is slated to launch on the New York Stock Exchange on March 21. 

"If you are about to embark upon an IPO and you have a major patent infringement lawsuit against you, it is going to raise the eyebrows of investors," Parks said.


Source: https://www.reuters.com/

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