Nokia, the world's leading handset maker, suffered a major setback on Thursday when a British court ruled that Nokia is infringing on a key patent of Germany’s IPCom GmbH & Co.

Nokia had asked the court to declare a patent held by IPCom GmbH & Co invalid. But, Judge Christopher Floyd upheld the patent that covers technology for letting mobile phones to connect to a 3G network.

The ruling means that the Finnish handset maker will have to pay up for using the concerned patent. The court’s decision depressed investors who sent shares down by more than 3 per cent to a thirteen-year low.

Welcoming the court’s decision, IPCom's managing director Bernhard Frohwitter said, “As far as we know, this is the first time that an essential telecoms 3G patent was ever upheld and judged infringed in the UK, a jurisdiction well-known for being very demanding for patent holders.”

On the other hand, the Finnish manufacturer said that it would appeal the decision.

The decision could hurt the sales of some Nokia handsets as IPCom said it would seek an injustion on the sale of some of Nokia’s 3G handsets in the UK.