Nokia sues Apple over patent infringements

Handset manaufacturer accuses Apple of " attempting to get a free ride on the back of Nokia’s innovation"

print this

The Finnish mobile phone giant Nokia announced in its press release on Thursday that it has filed a complaint against its rival Apple, accusing the California-based corporation of infringing Nokia’s patents.
      In Nokia’s view, Apple has been illegally benefiting from Nokia’s innovations in all its iPhone models shipped since the iPhone was introduced in 2007.
      ”By refusing to agree on appropriate terms for Nokia's intellectual property, Apple is attempting to get a free ride on the back of Nokia's innovation", says Ilkka Rahnasto, Vice President, Legal & Intellectual Property at Nokia, in the company’s statement.
     
The patent contest concerns ten Nokia patents for GSM, UMTS and wireless LAN (WLAN) standards.
      For some time, Nokia has been negotiating with Apple in order to agree on appropriate compensation for the use of Nokia's innovations.
      According to Nokia, the patents in the suit cover techonological innovations that are used for wireless data, speech coding, security, and encryption.
     
The ten patents are so-called ”essential patents” that Nokia is required to share at a reasonable cost as they have been defined to be an essential part of a certain technology standard, for example GSM. The holders of such patents are to license each other’s technology on fair, reasonable, and undiscriminatory terms.
      Nokia says that the company has already successfully entered into license agreements covering these patents with approximately 40 companies in the branch, including virtually all the leading mobile device vendors, allowing the industry to benefit from Nokia's innovation.
     
In other words, Apple is more or less the only company that has refused to accept Nokia’s licensing terms.
      During the last two decades, Nokia has invested approximately EUR 40 billion in research and development and built one of the wireless industry's strongest and broadest IPR portfolios, with over 10,000 patent families, according to the company’s statement.
      It is very likely that Apple has no ”essential patent” for any areas of wireless technology. Instead, it has patents covering the user interface of its iPhone handset.
      Nokia has filed its complaint against Apple with the US District Court in Delaware, which is specialised in patent contests.
     
In the summer of 2008, Nokia negotiated a compromise settlement with the American chipmaker Qualcomm in another patent infringement battle that had been continuing for many years.
      In the long-running dispute, each company accused the other of infringing patents for wireless communication technology.
     
A week ago, in its interim report for the third quarter of 2009, Nokia reported that its share of the global smartphone market had slipped back to 35% from 41% in Q2/2009.
      This section of the handset market, with its broader margins on sales, is highly significant, and Nokia's competitors such as Apple and Research In Motion, makers of the BlackBerry, appear to have gained ground at Nokia's expense. Apple reported a 47% jump in third-quarter profits only days after Nokia's figures were released.
     
On a general level, as communications equipment sales start to stagnate through increasing market saturation, manufacturers are becoming more aggressive in looking at ways of making money from their patents.
      Apple itself has not been immune to such temptations: earlier this year, when rival Palm launched the Pre, Apple threatened to sue Palm for patent infringments over over its multi-touch interface.


Previously in HS International Edition:
  Former courtroom adversaries Nokia and Qualcomm to commence cooperation (18.2.2009)
  Nokia still choked by recession; stock falls 11% in Helsinki and New York (16.10.2009)
  Sales of smartphones up around one million year-on-year (16.10.2009)
  Majority of device sales comes from cheap models (16.10.2009)

Links:
  Nokia press release 22.10.2009
  Nokia Q3 2009

Helsingin Sanomat