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Nokia sues Apple for technology infringement in Germany and USA

Finland’s Nokia has sued Apple, accusing the iPhone maker of violating 32 technology patents. Nokia yesterday announced that it has filed several complaints against Apple in Germany and the United States, accusing the Cupertino company of infringing on Nokia patents.

[bctt tweet=”Nokia is suing Apple over 32 patents the Finnish phone maker says it owns related to wireless handsets.” via=”@ThinkMarketingM”]

“The basic principle in the mobile industry is that those companies who contribute in technology development to establish standards create intellectual property, which others then need to compensate for,” said Ilkka Rahnasto, vice president, legal and intellectual property at Nokia. “Apple is also expected to follow this principle. By refusing to agree to appropriate terms for Nokia’s intellectual property, Apple is attempting to get a free ride on the back of Nokia’s innovation.”

Nokia has already reached licensing agreement on the patents in question with 40 other companies, including “most of the major device makers,” according to Nokia spokesman Mark Durrant. Apple has thus far refused to cooperate, and filing the lawsuit was a “last resort.” The two companies have been in negotiations for “some time,” he added.

Nokia says it has spent more than $60 billion (40 billion euros) on R&D related to wireless technology. The 10 patents it accuses Apple of violating are related to making phones able to run on GSM, 3G, and Wi-Fi networks. They include patents on wireless data, speech coding, security, and encryption, according to Nokia.

Since agreeing a license covering some patents from the Nokia Technologies portfolio in 2011, Apple has declined subsequent offers made by Nokia to license other of its patented inventions which are used by many of Apple’s products.
Apple sued Acacia Research Corp and Conversant Intellectual Property Management Inc on Tuesday.
It accused them of colluding with Nokia to extract and extort exorbitant revenues unfairly and anti competitively from Apple.

The legal action by Nokia and iPhone maker Apple appear to mark a revival of the ‘smartphone patent wars’ that began five years ago, when Apple filed a series of patent infringement cases against Samsung Electronics around the world, with wins and losses on both sides.

Nokia, once the world’s dominant cellphone maker, missed out on the transition to smartphones triggered by Apple’s introduction of the iPhone in 2007.

The Finnish company sold its handset business to Microsoft (MSFT.O) two years ago, leaving it with its telecom network equipment business and a patent portfolio.

But this year, Microsoft sold its Nokia feature phone business to a new company called HMD Global and Nokia agreed to a 10-year licensing deal with HMD, which continues to market low-cost Nokia phones and plans to introduce new Nokia smartphone models in 2017.

Apple is one of a few companies–Nokia wouldn’t expand on who the others might be–that is not licensing Nokia’s 10 patents. Nokia says that for any phone to run on a GSM, 3G, or Wi-Fi network, it would have to license one of its patents.

Though it is asking the court to halt sales of the iPhone, the general consensus by legal observers and those who follow Nokia, is that it’s not actually trying to pull the iPhone off the market permanently–injunctions are always used as leverage in these cases–but rather that it wants Apple to pay its fair share.

“There are companies that are patent trolls, that don’t participate in the creation of technology, or they secretly acquire them. Nokia’s not one of these companies. They’re pretty up front about the patents they own,” noted Jason Schultz, director of the Samuelson Law, Technology & Public Policy Clinic at the UC Berkeley School of Law. “They’re probably not trying to put Apple out of business…but force Apple to play the same game that every other phone company has to play.”

Apple analyst Gene Munster thinks Nokia is looking to extract a royalty payment of 1 percent to 2 percent of every iPhone sold from Apple, which would be about $6 to $12 per phone. With 34 million iPhones sold to date, that would be $204 million to $408 million in back payments Apple would have to pay if Nokia were successful in court. There’s also the added risk of something called “willful infringement.” Basically, if Apple were to be found in violation it’d have to pay three times the amount of whatever the judgment won by Nokia.

Apple could settle out of court, or it could try to show that Nokia either doesn’t own the patents or that they’re not valid in this case, both of which would be difficult, said Schultz.

“Invalidating 10 patents is a lot, that’s like running the Boston Marathon. It’s really hard to do. You might get one, two or even five,” he said. “But 10 is a lot.”

If it does go to court, strap in for a long ride. This kind of case could take up to two or three years of litigation.


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