Nokia suit against Apple seen as battle of two Goliaths

Posted:
in iPhone edited January 2014
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."
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Comments

  • Reply 1 of 76
    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?
  • Reply 2 of 76
    roos24roos24 Posts: 170member
    And the winners are: a bunch of greedy lawyers....
  • Reply 3 of 76
    saareksaarek Posts: 1,031member
    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.
  • Reply 4 of 76
    povilaspovilas Posts: 473member
    Quote:
    Originally Posted by saarek View Post


    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.
  • Reply 5 of 76
    gwydiongwydion Posts: 1,067member
    Quote:
    Originally Posted by afishertx View Post


    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.
  • Reply 6 of 76
    povilaspovilas Posts: 473member
    Quote:
    Originally Posted by Gwydion View Post


    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?
  • Reply 7 of 76
    gwydiongwydion Posts: 1,067member
    Quote:
    Originally Posted by Povilas View Post


    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.
  • Reply 8 of 76
    mark2005mark2005 Posts: 1,158member
    Quote:
    Originally Posted by saarek View Post


    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.
  • Reply 9 of 76
    povilaspovilas Posts: 473member
    Quote:
    Originally Posted by Gwydion View Post


    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.
  • Reply 10 of 76
    gwydiongwydion Posts: 1,067member
    Quote:
    Originally Posted by mark2005 View Post


    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.
  • Reply 11 of 76
    gwydiongwydion Posts: 1,067member
    Quote:
    Originally Posted by Povilas View Post


    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.
  • Reply 12 of 76
    povilaspovilas Posts: 473member
    Quote:
    Originally Posted by Gwydion View Post


    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.
  • Reply 13 of 76
    mark2005mark2005 Posts: 1,158member
    Quote:
    Originally Posted by Gwydion View Post


    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?
  • Reply 14 of 76
    mark2005mark2005 Posts: 1,158member
    Quote:
    Originally Posted by Povilas View Post


    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.
  • Reply 15 of 76
    markbmarkb Posts: 153member
    Quote:

    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.
  • Reply 16 of 76
    povilaspovilas Posts: 473member
    Quote:
    Originally Posted by mark2005 View Post


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



    And if Apple wins?
  • Reply 17 of 76
    Quote:
    Originally Posted by Roos24 View Post


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



    agreed...
  • Reply 18 of 76
    sdw2001sdw2001 Posts: 16,890member
    Quote:
    Originally Posted by markb View Post


    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.
  • Reply 19 of 76
    wigginwiggin Posts: 2,258member
    Quote:
    Originally Posted by mark2005 View Post


    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.
  • Reply 20 of 76
    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.
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