HELSINKI – Nokia Corp. says it has entered into a new license agreement with Canadian smartphone rival Research In Motion which will end all existing patent litigation between the two struggling companies.

Nokia (NYSE:NOK) said Friday that the agreement includes a “one-time payment and on-going payments, all from RIM to Nokia,” adding that the terms were confidential.

The announcement clears away a potentially troublesome obstacle for Research In Motion (TSX:RIM), which is preparing to launch its BlackBerry 10 line of products in the new year.

The Canadian smartphone company announced Thursday that it had US$2.73 billion of revenue in the quarter, down from US$5.17 billion but above the consensus estimate.

RIM’s loss on an adjusted earnings basis was also not as bad as anticipated — US$114 million or 22 cents per diluted share, 10 cents above the consensus estimate of 32 cents per adjusted share on revenue of $2.6 billion.

The agreement with Nokia removes one of the potential roadblocks to a claan launch for the BlackBerry 10, which is widely seen as a make-or-break development for the Waterloo, Ont.-based RIM.

Last month, the Finnish company sued the Blackberry maker for breach of contract in Britain, the United States and Canada over cellular patents they agreed on in 2003.

Although analysts widely expected Nokia and RIM would find a compromise deal, it was possible that the litigation would drag through the courts.

Major manufacturers of phones and wireless equipment are increasingly turning to patent litigation in the rapidly growing lucrative smartphone market.

Nokia is among leading patent holders in the industry. Last year, it received a $565 million royalty payment from Apple Inc. to settle long-standing patent disputes.

— with files from The Canadian Press