Nokia suit against Apple seen as battle of two Goliaths

[AppleInsider]

Apple this week vowed to "vigorously" defend itself against an iPhone-related patent infringement suit from Nokia, the world's largest handset maker.

In its annual Form 10-K (PDF) with the U.S. Securities and Exchange Commission for the fiscal year 2009, Apple noted the lawsuit with Nokia, which alleges that the iPhone infringes on ten wireless technology related patents owned by the Finnish company. The suit was officially filed by Nokia in a U.S. District Court in Delaware last week.

"The complaint alleges that these patents are essential to one or more of the GSM, UMTS and 802.11 wireless communication standards, and that the Company has the right to license these patents from plaintiff on fair, reasonable, and non-descriminatory ("FRAND") terms and conditions," Apple said. "Plaintiff seeks unspecified FRAND compensation and other relief. The Company's response to the complaint is not yet due. The Company intends to defend the case vigorously."

Analyst Gene Munster with Piper Jaffray said he believes that Nokia seeks a 1 percent to 2 percent royalty on every iPhone sold, which would amount to $6 to $12 per phone. Nokia's patents are related to GSM, 3G and Wi-Fi, and cover wireless data, speech coding, security and encryption. Nokia has alleged that all iPhone models released since 2007 infringe on these patents.

Given the size of the two companies involved, Bill Merritt, head of mobile licensing firm InterDigital, told Reuters that he believes the patent infringement case is likely to last for more than a year. If Apple chooses to defend itself or countersue, he said, the case would likely last two or three years.

"It's not a David versus Goliath story," he said. "These are two Goliaths."

In a statement last week, Nokia accused Apple of "attempting to get a free ride" off of the company's 40 billion Euros in research and development over the past two decades.

As the iPhone has grown in popularity, Nokia has retained its status as market leader, but has lost significant share of the market it has dominated. As recently as August, Nokia's Symbian mobile platform was said to have a 50 percent market share, well down from the 72 percent the platform had in 2006. In the second quarter of 2009, the iPhone represented 14 percent of global smartphone sales.

The Nokia suit is among a number of legal proceedings noted in Apple's Form 10-K filed with the SEC. The company said that it is currently defending itself from more than 47 patent infringement cases, 27 of which were filed during the 2009 fiscal year.

"Regardless of merit," Apple said, "responding to such claims can consume significant time and expense."

[afishertx]

Is it just me, or would this be like Mercedes suing Ford in the early 1900's because thier vehicles also had four wheels, seats, and internal combustion engines?

[Roos24]

And the winners are: a bunch of greedy lawyers....

[saarek]

I am sure Nokia has a large portfolio of patents and almost certainly has rolled out a significant amount of tech that other companies are using and have licensed.

It's only fair that Apple pays for what others researched and developed, I love my iPhone and don't own a Nokia device, but should someone copy a patented iPhone feature you can bet Apple would want their slice of the financial pie.

[Povilas]

Originally Posted by saarek

I am sure Nokia has a large portfolio of patents and almost certainly has rolled out a significant amount of tech that other companies are using and have licensed.

It's only fair that Apple pays for what others researched and developed, I love my iPhone and don't own a Nokia device, but should someone copy a patented iPhone feature you can bet Apple would want their slice of the financial pie.

So you just assumed Apple is guilty. Nice.

[Gwydion]

Originally Posted by afishertx

Is it just me, or would this be like Mercedes suing Ford in the early 1900's because thier vehicles also had four wheels, seats, and internal combustion engines?

Just you. Nokia is not suing Apple for making a handset, it's suing it for allegedly using technolgy covered by Nokia patents without paying.

[Povilas]

Originally Posted by Gwydion

Just you. Nokia is not suing Apple for making a handset, it's suing it for allegedly using technolgy covered by Nokia patents without paying.

And maybe all/some/most are to trivial to be considered as such and Apple will prove it in a court? Do you think they didn't check the patents that have even a remote connection to phones, wireless data, speech and etc?

[Gwydion]

Originally Posted by Povilas

And maybe all/some/most are to trivial to be considered as such and Apple will prove it in a court? Do you think they didn't check the patents that have even a remote connection to phones, wireless data, speech and etc?

So you just assumed Apple is innocent. Nice.

I don't know if it's innocent or guilty, I assume that Nokia has to prove it's allegations, meanwhile Apple is innocent but time will tell.

[mark2005]

Originally Posted by saarek

I am sure Nokia has a large portfolio of patents and almost certainly has rolled out a significant amount of tech that other companies are using and have licensed.

It's only fair that Apple pays for what others researched and developed, I love my iPhone and don't own a Nokia device, but should someone copy a patented iPhone feature you can bet Apple would want their slice of the financial pie.

There is a group of tech companies, including Nokia, Qualcomm, and Ericsson, that have cross-licensed GSM and 3G patents. I believe Apple's position will be that they are already paying others in that pool for this IP, when they buy the chips.

IANAL, so I have no take on who is right here.

[Povilas]

Originally Posted by Gwydion

Time will tell.

That's for sure, but from my perpective looks like Nokia is loosing it. If they had a case why wait almost 3 years? If these patents cover essential functionality Nokia knew it from the day iPhone was released. Something is not right here.

[Gwydion]

Originally Posted by mark2005

There is a group of tech companies, including Nokia, Qualcomm, and Ericsson, that have cross-licensed GSM and 3G patents. I believe Apple's position will be that they are already paying others in that pool for this IP, when they buy the chips.

IANAL, so I have no take on who is right here.

But one thing are chips and other is the phone firmware, doesn't it?

I think that Nokia is suing Apple about the iPhone firmware (baseband et al.) and not for using 3G/UMTS/etc chips.

[Gwydion]

Originally Posted by Povilas

If they had a case why wait almost 3 years? If these patents cover essential functionality Nokia knew it from the day iPhone was released. Something is not right here.

2 years it's not a long time for investigating iPhone, take converations with Apple, and the suing it.

[Povilas]

Originally Posted by Gwydion

So you just assumed Apple is innocent. Nice.

I don't know if it's innocent or guilty, I assume that Nokia has to prove it's allegations, meanwhile Apple is innocent but time will tell.

All I assume is that these patents aren't bulletproof, if that was the case Apple would have licensed everything from day one.

[mark2005]

Originally Posted by Gwydion

But one thing are chips and other is the phone firmware, doesn't it?

I think that Nokia is suing Apple about the iPhone firmware (baseband et al.) and not for using 3G/UMTS/etc chips.

Do we know that Apple wrote the low-level firmware and didn't just buy it along with the chips?

[mark2005]

Originally Posted by Povilas

All I assume is that these patents aren't bulletproof, if that was the case Apple would have licensed everything from day one.

Yep, Apple is breaking new ground here, and shaking the cellular industry once again.

[markb]

If they [Nokia] had a case why wait almost 3 years?

Its classic. You have to wait until its worth your while to sue. If the iPhone had flopped, there would be no FRAND compensation to collect. Now that its a proven winner and is growing Nokia says "Me too!" They let Apple take all the risk and are trying to cash in on their success. That is to say unless Apple blatantly stole IP, but I think that is highly unlikely, there would be no motive in it for them. IP law in the US is mostly garbage and essentially just a money generator for lawyers.

[Povilas]

Originally Posted by mark2005

Yep, Apple is breaking new ground here, and shaking the cellular industry once again.

And if Apple wins?

[doyourownthing]

Originally Posted by Roos24

And the winners are: a bunch of greedy lawyers....

agreed...

[SDW2001]

Originally Posted by markb

Its classic. You have to wait until its worth your while to sue. If the iPhone had flopped, there would be no FRAND compensation to collect. Now that its a proven winner and is growing Nokia says "Me too!" They let Apple take all the risk and are trying to cash in on their success. That is to say unless Apple blatantly stole IP, but I think that is highly unlikely, there would be no motive in it for them. IP law in the US is mostly garbage and essentially just a money generator for lawyers.

I think the court may end up seeing it that way. Nokia waits two years to sue...which happens to be exactly when the iPhone begins kicking their ass. As for IP law, I'm no expert. However, my brother was a patent examiner, member of the patent bar and is now in law school focusing on IP. I don't get the impression that it's garbage, even if it IS a money generator.

[Wiggin]

Originally Posted by mark2005

There is a group of tech companies, including Nokia, Qualcomm, and Ericsson, that have cross-licensed GSM and 3G patents. I believe Apple's position will be that they are already paying others in that pool for this IP, when they buy the chips.

IANAL, so I have no take on who is right here.

Or it could even be as simple as Nokia asking an unfair license fee from Apple because they view the iPhone as a huge threat to their handset busienss. If they only charge every other maker $1/phone and want to charge Apple $10/phone, it would no longer be "fair, reasonable, and non-descriminatory" terms.

[timgriff84]

Without any real knowledge of the specifics that make up the iPhone and what Nokia has patents for, you can't really call it one way or another. But given the amount of time Nokia has been in the industry, there's going to be a lot of things they have patents for, and its not like Apple could just check if there was a patent or not. Assumed standards could actually be paintented.

Apple is also well known for getting involved in open source work so its easily feasible that any open source code that made it into the iPhone is breaking Nokia's paintent.

Bit by bit though with every article you read about bits of the iPhone being someone else's, or other people copying things seen in the iPhone but leading to no lawsuit from Apple. You gotta start wondering is any of it actually theres or is it just a collection of really good things from other people with nice icons.

[markb]

Originally Posted by SDW2001

As for IP law, I'm no expert. However, my brother was a patent examiner, member of the patent bar and is now in law school focusing on IP. I don't get the impression that it's garbage, even if it IS a money generator.

I might just be bitter, but if IP law was working anything like intended, you wouldnt see countless tech lawsuits that pay off because a jury somewhere in Texas, educated at a highschool level, is conned into thinking they know what it takes to create such IP.

Most tech companies I have worked with seek patents just as a preparation to sue in case someone makes a dead end technology pay.

[Gazoobee]

Originally Posted by Gwydion

2 years it's not a long time for investigating iPhone, take converations with Apple, and the suing it.

You say that you haven't decided who is right or wrong, but you continue to argue points that leave room for Apple to be on the wrong side of this. I think it's clear that you have formed somewhat of an opinion like the rest of us. This statement I'm replying to for instance seems IMO to be just an opinion.

It's true that nothing can be determined until at least a teeny-tiny bit of the facts are known and right now we nothing other than the bare fact that company A is suing company B. All that being said though, the comments (by some), above to the effect of people drawing conclusions and presuming the innocence or guilt of one party or the other are a bit off-base IMO. True we don't know the facts, but that doesn't invalidate having an opinion on how things look right now. If you believe that we should wait then the whole thread might as well be deleted.

IMO in the absence of facts to the contrary, I think it's more likely that Apple in in the right here. I think this simply because of what I know about the two companies involved and the history we know about the development of the iPhone. That doesn't mean I'm right, but it doesn't invalidate the fact that I have an opinion, or mean that said opinion is based on nothing at all.

Apple is the new player in the market. They didn't just willy-nilly decide to make a phone one day and jump in the market. They have one of the sharpest legal teams on the planet and years and years of experience in the field. They planned everything about this project in great detail over a long multi-year period before we even got a single hint that they were even making a phone. I think it's very unlikely that they did not know about these patents, and even more unlikely that they would just ignore them.

One has to assume at least that they have a very very good argument as to why they shouldn't pay, and one also has to assume that they in fact *do* pay *some* parties for *some* licensed technology for the iPhone. It makes no sense to me that while planning this product they costed out those patents and then decided to not pay for some of them unless they had a good reason to believe they could get away with it.

[irnchriz]

Well, we don't know whether there had been negotiations with Apple for fees prior to this case but it is almost certain that the fact Nokia are up shit creak financially* that they have brought this case. To be honest, they should be looking at sacking their board of directors if they can piss away such an amount of money.

*Nokia's third quarter 2009 reported overall operating loss was EUR 426 million, compared with an operating profit of EUR 1.5 billion in the third quarter 2008. Thats a drop of nearly EUR 2 billion from this time last year. Operating profit in Devices & Services decreased 51% to EUR 785 million (EUR 1,602 million Q3 2008) . Ouch.

[macsmarts]

Sue you, sue him
sue anyone who pays!
If I was a lawyer
I'd sue for all my days

[oomu]

in so many cases like these, the two parties cannot agree about WHO pay WHAT.

There are many reasons to think you have rights but no.

Maybe you bought the technology to someone else with the right, but in fact they were not authorized to licence it themselves

or maybe the original creator think they have not the right, but in fact they did (!)

or they use a version for a body standard and you are part of the organisation ?


there were many older case. none of the both parties were Evil, all both parties tried to explain they were right, and the judge and jury spend MONTH to read all the papers to know what is what.

and sometimes, the looser sued an other company who told they sold them the rights but.. no, in fact it was wrong.

I think Apple is right or wrong and neither Nokia or Apple are evil.
I will continue to buy apple and nokia stuff.

the patent system is THAT broken.

[geekdad]

Originally Posted by irnchriz

Well, we don't know whether there had been negotiations with Apple for fees prior to this case but it is almost certain that the fact Nokia are up shit creak financially* that they have brought this case. To be honest, they should be looking at sacking their board of directors if they can piss away such an amount of money.

*Nokia's third quarter 2009 reported overall operating loss was EUR 426 million, compared with an operating profit of EUR 1.5 billion in the third quarter 2008. Thats a drop of nearly EUR 2 billion from this time last year. Operating profit in Devices & Services decreased 51% to EUR 785 million (EUR 1,602 million Q3 2008) . Ouch.

You are right about the board of directors! If they lost that much money why would you let them continue to run the company?
As to the lawsuit....I think this kind of suit goes on more than we think. Nokia waited until it would be economically feasible for them to sue. It also seems from some articles that they WERE in contact with Apple from the beginning and that the negotiations were not progressing so they decided to sue.
Here is an article from PC World:
http://tech.yahoo.com/news/pcworld/2...oftheiphonepie
Anyway I think in the long run Apple will settle and pay Nokia a licensing fee......

[teckstud]

I highly doubt that the Finnish conservative Nokia's lawsuit does not merit validity in their case.
We're not talking Pystar here. Good luck Apple.

Apple sues if you use the word "pod" in you website or have a fruit logo with the stem facing left (our right).
The Karma chameleon has struck again.

[DKWalsh4]

Originally Posted by markb

I might just be bitter, but if IP law was working anything like intended, you wouldnt see countless tech lawsuits that pay off because a jury somewhere in Texas, educated at a highschool level, is conned into thinking they know what it takes to create such IP.

Most tech companies I have worked with seek patents just as a preparation to sue in case someone makes a dead end technology pay.

For once, this lawsuit was actually filed in Delaware, not Texas. That off the bat gives it more credibility than others.

[teckstud]

Originally Posted by DKWalsh4

For once, this lawsuit was actually filed in Delaware, not Texas. That off the bat gives it more credibility than others.

It's Nokia for godsake!! The largest cellphone manufacturer in Europe and Asia. People here think they would persue this without a strong case?

I'm still waiting for Apple to sue Palm re iTunes . Where's that case? Maybe Apple doesn't have one?

[markb]

It's Nokia for godsake!! The largest cellphone manufacturer in Europe and Asia. People here think they would persue this without a strong case?

And what? Apple isnt conservative? Isnt one of the largest tech companies in the US with tons of lawyers who could see cases like this 3 years off? Would willing open itself up to a massive judgment when there is no reason to?

Nokia has a lot of valid IP in this area, and I am sure but it is all going to come down to which shades of grey the lawyers can make a jury see. They patented most of this stuff so they could possibly stiffle competition and get a payday if someone out does them...just like any tech company out there.

Tekstud, Did Apple kick your puppy when you were a kid or something?

[teckstud]

Originally Posted by markb

And what? Apple isnt conservative? Isnt one of the largest tech companies in the US with tons of lawyers who could see cases like this 3 years off? Would willing open itself up to a massive judgment when there is no reason to?

Nokia has a lot of valid IP in this area, and I am sure but it is all going to come down to which shades of grey the lawyers can make a jury see. They patented most of this stuff so they could possibly stiffle competition and get a payday if someone out does them...just like any tech company out there.

Tekstud, Did Apple kick your puppy when you were a kid or something?

Dude - you're defending Apple like this is the Pystar case. Go back to drinking your morning Koolatra brew. You obviously have your distortion field mode on.
And FYI, greedy is not synonomous for conservative.

[markb]

Dude - you're defending Apple like this is the Pystar case. Go back to drinking your morning Koolatra brew. You obviously have your distortion field mode on.
And FYI, greedy is not synonomous for conservative.

So Apple is just greedy, but Nokia is conservative? And I am the one with the distortion field on? Do you have any experience in business?

Lol, I have no idea what a "Koolatra brew" is, perhaps you could enlighten us. I am glad to see that there is someone more bitter than me about this issue, however I find it strange that you consistantly and constantly rant (baselessly for the most part) about Apple on a pro Apple site. Seems like you would have a better forum over at Tom's Hardware or Anadtech, but I guess here you arent just one Troll among many and you can feel like a big man.

Ill stop feeding the Troll now, rant away...

[teckstud]

Originally Posted by markb

So Apple is just greedy, but Nokia is conservative? And I am the one with the distortion field on? Do you have any experience in business?

Lol, I have no idea what a "Koolatra brew" is, perhaps you could enlighten us. I am glad to see that there is someone more bitter than me about this issue, however I find it strange that you consistantly and constantly rant (baselessly for the most part) about Apple on a pro Apple site. Seems like you would have a better forum over at Tom's Hardware or Anadtech, but I guess here you arent just one Troll among many and you can feel like a big man.

Ill stop feeding the Troll now, rant away...

Only a Fanbot would religiously defend Apple in every singly case as you do. FYI- I do not "constistently and constantly rant" against Apple, I just don't defend it blindly.
You say Apple is conservative yet give no explanation. Do you have experience in anything other than cheerleading BIG MON?

[zindako]

I wonder if RIM and all the other phone makers are being looked at by Nokia.

[ivan.rnn01]

We'll see Apple's iPhone in China.

[geekdad]

Originally Posted by zindako

I wonder if RIM and all the other phone makers are being looked at by Nokia.

I think it was noted in a link I posted earlier that Nokia had licensing agreements from the other service providers. They contacted Apple when the iPhone came out but the negotiations did not go very well in reaching an agreement for licensing....from Nokia's point of view anyway....so that is why they sued.

[success]

Originally Posted by Roos24

And the winners are: a bunch of greedy lawyers....

Why are they greedy? They're hired aren't they? They chose a good profession didn't they? Is it not the fault of the patent system that $$ gets wasted? Anyway regardless of who's fault it is, I'm sure if your child or parent was raking it in as an IP lawyer I'm sure you wouldn't be complaining.

[sheff]

Nokia should be paying apple for basically single handedly switching a good chunk of US cellphone users to a smartphone, increasing business for all.

[anantksundaram]

Originally Posted by teckstud

You say Apple is conservative yet give no explanation...

And, what (and where) is your explanation for why Nokia is 'conservative'?