ie8 fix
Click Here

Between the Lines

Larry Dignan, Andrew Nusca and Rachel King
Home / News & Blogs / Between the Lines

Smartphone wars: Apple fires back at Nokia; Court skirmishes heat up

By | February 22, 2010, 2:15am PST

Summary: The latest patent skirmish between Apple and Nokia is just a precursor to a series of court cases over the intellectual property that powers smartphones.

Apple has responded to Nokia’s patent suit and argued in court documents that the mobile phone giant is violating antitrust laws with its “unreasonable” royalty requests for standard technology.

The latest skirmish between Apple and Nokia comes as mobile phone players are increasingly duking it out in court and via the International Trade Commission (ITC).

To wit:

That’s a full plate for sure.

What are most of these skirmishes about? Patents and licensing terms mostly. Those with patents want more money out of those licensing technology. And if parties don’t agree it quickly turns into a court skirmish. Nokia and Apple are exhibit A of this trend.

In October, Nokia filed a lawsuit against Apple alleging infringement on 10 patents. Nokia wanted royalties on 42 million iPhones sold so far. Apple countersued in December and prepared its initial response. Nokia then fired back.

On Friday, Apple returned fire and delivered its complete response to the Nokia complaint. The big difference this go round: Apple is playing the antitrust card.

Apple argues that Nokia didn’t disclose its intellectual property rights in a timely manner and now Nokia has monopoly power over five areas that essentially make a wireless phone work. Apple alleges that Nokia misled standard setting groups so it could ensure its inventions were included in Wi-Fi, wireless transmissions and similar technologies. Apple adds that Nokia’s patent claims on devices that use GSM, GPRS, EDGE, UMTS and WLAN standards will raise prices for all.

Apple also adds that Nokia’s rates are too high.

Here are a few choice excerpts from the filing (download complaint PDF):

These charges and countercharges are going to sound familiar in the not-too-distant future. There are plenty of patent squabbles in the wireless phone pipeline.

Related:

Kick off your day with ZDNet's daily e-mail newsletter. It's the freshest tech news and opinion, served hot. Get it.

More from “Between the Lines”

Topics

Patent, Nokia Corp., Apple Inc., Smartphone, International Trade Commission, Corporate Law, Wireless And Mobility, Business Operations, Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

Disclosure

Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

For daily updates, follow Larry on Twitter.

33
Comments
Add Your Opinion

Join the conversation!

Just In

RE: Smartphone wars: Apple fires back at Nokia; Court skirmishes heat up
whutd 25th Sep
@Sleeper Service If only everything was that simple. Unfortunately it isn't. When you think of the money involved it just makes me feel nau seous.
View in thread
0 Votes
+ -
*Sigh*
Sleeper Service 22nd Feb 2010
Can they not just meet over a copy and thrash this one out?

Because, aside from the lawyers fees, that's what's going to happen anyway.
0 Votes
+ -
RE: Smartphone wars: Apple fires back at Nokia; Court skirmishes heat up
whutd 25th Sep
@Sleeper Service If only everything was that simple. Unfortunately it isn't. When you think of the money involved it just makes me feel nau seous.
0 Votes
+ -
I say we just invalidate these Apple and Nokia patents
T1Oracle 22nd Feb 2010
and stop impeding technology with endless lawsuits. I understand patents protect the little guy and lets them get a foot hold in the market so they can compete, but neither of these companies is little.
0 Votes
+ -
ROI
bigsibling 22nd Feb 2010
If a company, large or small, cannot have some kind of reasonable expectation for getting a return on its research & development investment, how much R&D do you think will actually occur? Why would anybody innovate anything, instead of waiting for someone else to do it, and then just take the tech and use it for free?
0 Votes
+ -
Nokia sat on their butts for three years...
olePigeon 22nd Feb 2010
Nokia sat on their butts for three years, what is Apple supposed to do?
Seems to me Nokia was trying to force Apple to not enter the cell phone
market by refusing to license or license at an unreasonable price.

If Nokia cared so much about their intellectual property, it wouldn't be
waiting three years to do something about it.
0 Votes
+ -
What makes you think they "waited?"
kckn4fun 22nd Feb 2010
Read the lawsuits. Negotiations have been going on for some time. Furthermore, Apple has an army of IP lawyers that have to do patent searches for Apple's own patents...why didn't they do a patent scrub on their own products prior to release-- like the rest of the technology world?

Don't be so naive as to think that Nokia "waited" three years. They had to hear about the infringement first, then hire a forensic expert to confirm the infringement by way of reverse engineering, notify Apple and then start negotiating. As an engineer with *plenty* of experience in forensic reverse engineering, I can tell you that it probably took over one year just to perform the analysis.
0 Votes
+ -
Sounds good to me.
Bruizer 22nd Feb 2010
That goes for about 95% of the rest of the patents out there as well.

My favorite:
http://www.google.com/patents?vid=USPAT5443036
0 Votes
+ -
If they did this they would do that for all patents....
dougogd@... 8th May 2010
@T1Oracle Then the little companies and individuals that have patents would be able to collect money on their inventions.
0 Votes
+ -
Giants in a sandbox.
Bruizer 22nd Feb 2010
[Jack Nicholson]Why can't we all just get along?[/Jack
Nicholson]
0 Votes
+ -
I had a long laugh reading the first paragraph
pupkin_z 22nd Feb 2010
this is why it is called "patent". Somebody invests in a technology a lot of money at the time nobody beleives in it, now it is time to get it back. Patents by Nokia is a real deal - years of R&D and engineering.

This is one lamest excuse - unreasonable royalty request. IS it the best they can offer? Don't they have anyting to offer Nokia in return? Apple has lots of valuable patents, doesn't it?
0 Votes
+ -
what cracks me up ...
kckn4fun 22nd Feb 2010
...is how Apple goes after those it feels infringes upon their IP rights ... (vis a vis Psystar) ... yet doesn't want to play ball when they are infringing upon someone elses.

Apple will lose, eventually, and have to pay up. What I am anxious to see is if, like Microsoft, they'll have the cash on hand to handle the royalties that will be due.
0 Votes
+ -
MS already pays them.
Fark Updated - 22nd Feb 2010
That's one of the biggest problems for Apple. All other tech makers agree Nokia OWNS these patents and are paying them royalties. Apple has been stiffing Nokia, the other big players have not.

I think Apples best bet is to try and invalidate the patents - but they risk making an arguement that could hurt them later on in their own patent disputes.
0 Votes
+ -
Rubbish!
netzd 22nd Feb 2010
What rubbish! To say that Apple is wrong with its case against Psystar is ridiculous! Not only did Psystar break the law, but the courts found them guilty as charged!

As far as whether or not Apple has the money, like Microsoft, to pay for any royalties that might be due if they lose, is an ignorant statement since Apple has billions of dollars more in cash than does Microsoft, as you can see in the old report below. You can now add about 10 billion dollars more to the one below!

http://blog.seattlepi.com/microsoft/archives/152434.asp

As some analysts have pointed out, Nokia may be trying to force Apple to license its multi-touch technology patents, because it's being beaten in the smart phone market by the likes of Apple, RIM and now Android!

The very tone of your comment shows, to me, that you have a major bias against Apple and that you are not interested in the least in the facts, but just what ever makes Apple look like the bad guy here!
0 Votes
+ -
Just facts
frabjous 24th Feb 2010
As of the latest reports to the SEC, Apple has no debt and $24.8
billion (B) in cash.

Nokia is a Finnish company and their reporting, besides being in
Euros, is not quite comparable--but I can see that their debt is
more than double their "bank and cash."
0 Votes
+ -
If you read the response
Snooki_smoosh_smoosh 7th May 2010
@kckn4fun: Apple's counterclaim is that while in negotiations with Nokia, Nokia refused FRAND (Fair/Reasonable and Non-discriminatory) terms. Basically comes down to Nokia may have been trying to milk more money out of Apple then other companies thus not complying with FRAND terms.
0 Votes
+ -
If you bothered with facts instead of agenda
frgough 22nd Feb 2010
you'd realize that the basis for Apple's unreasonable royalty claim is that
Nokia is trying to charge them a DIFFERENT ROYALTY SCHEDULE than
they are ALL OTHER cellphone vendors.

Get it? Or are you too comfortable in your little cocoon of prejudices.
0 Votes
+ -
Substantiation please...
PollyProteus 22nd Feb 2010
You wrote: "Nokia is trying to charge them a DIFFERENT ROYALTY SCHEDULE..."

Link to the trustable proof would be appreciated, and a snippet of Apple's complaint is not proof.

From what I read in the article, Nokia says they are using the standard royalty fees for this technology. Historically, Apple's problem isn't that they have to pay royalty fees, it's that Apple doesn't want to pay the going rate.

The only exception to that rule, based upon Apple's history is the eBook cost for iPad users.

Now as for others paying Apple whatever Apple demands is another story.
0 Votes
+ -
@PollyProteus
Axsimulate 22nd Feb 2010
Did you even read what has been going on? Apple asked Nokia repeatedly to show them what they were charging other companies and Nokia repeatedly refused. This leads to the conclusion that they (Nokia) has something to hide. If Nokia was being honest and charging the same low cost royalty to everyone as they are bound to from the standards committee, then what do they have to hide? Why not show what they are charging everyone else? I think Nokia is about to get busted for being dishonest and charging variable rates.
0 Votes
+ -
It's a real pity...
oncall Updated - 22nd Feb 2010
These articles are like beating a dead horse. It's like "Well it's a boring Monday so let's stir up the Nokia vs. Apple debate again" wink


Here is one of the better summaries I've run across:
http://www.roughlydrafted.com/2009/12/11/the-real-patent-story-behind-apple-vs-nokia/
0 Votes
+ -
Good stuff
frabjous 24th Feb 2010
"oncall," that was a good link to an interesting story, with more
history and analysis than the article we are all commenting on. I
read it to the end and learned it was written by Dan Dilger, who I
consider to be a "trusted source." Thanks!

http://www.roughlydrafted.com/2009/12/11/the-real-patent-
story-behind-apple-vs-nokia/
0 Votes
+ -
Obligation?
Dr. John 22nd Feb 2010
Does Nokia have an obligation to share its business records with Apple? No. End of story.

If it were Nokia asking Apple for their business records, it would be no different.
0 Votes
+ -
@Dr. John
Axsimulate Updated - 22nd Feb 2010
Nokia has already committed itself to license its standards-related patents using ?fair, reasonable and non-discriminatory terms.? They also have the obligation to show that they are charging fair and reasonable rates. If they are, they have nothing to hide.
Not only that, if you read deeper you will see Nokia is using it's IP as a tool to attempt to gain access to Apple IP.
0 Votes
+ -
I don't buy the "nothing to hide" argument
Dr. John 26th Feb 2010
While you may have valid points regarding the IP in question, the "nothing to hide" argument is one that automatically engages my stop button.
0 Votes
+ -
Apple again trying to get over
Fletchguy 22nd Feb 2010
Just another case where corporate evil Apple is trying do what it wants without paying thiose who make what they sell possible. Apple steals ideas, marketing, and patented materials. i say we fine every apple user and apple company for using devices that are illegally sold and purchased because of patent infringment this would make the world a better apple free place...
0 Votes
+ -
That would be difficult...
Fark 22nd Feb 2010
A court COULD require Apple to disable all the disputed technology in their phones - which would turn them into very basic corded iTouch devices.

Though I doubt that would happen. Apple would sue and appeal for ever before they let that happen.
0 Votes
+ -
Did you even read the article??
Stuka 22nd Feb 2010
What you are saying doesn't even go along with what was said.

Apple is fine with paying the license fee, the issue is that Nokia refuses to let Apple know what its standard pricing for said license is.

Nokia claims they are wanting apple to pay Their "Standard fee". However, when Apple asked to see a list (anonymous if needed) of what other companies pay for the same license to verify that it is their standard, they refused.

The most likely reason is that Nokia is trying to charge Apple far more than what others pay.

And don't forget that Nokia is also infringing on some of Apples patents.

However, I feel I am speaking on deaf ears. As it is clear you are just some Apple hater that refuses to listen to reason.

And if you want Apple to not be able to sell anything that infringes on any patent, that pretty much means every tech company on earth would have to stop selling what they sell.
0 Votes
+ -
Wrong again
frabjous 24th Feb 2010
As usual, Fletchguy, you ignore any facts that get in the way of
your Apple-bashing, so I would expect no different this time. In
fact, Nokia is infringing on Apple patents, is not following
standards agreements it made on patent licensing and is acting
like a desperate company that thought it had a market tied up--
but failed to anticipate the industry change that the iPhone
started.
0 Votes
+ -
RE: Smartphone wars: Apple fires back at Nokia; Court skirmishes heat up
ddrmueller Updated - 22nd Feb 2010
@frgough

if you bothered with facts you would know that apple never licensed the technology instead just willingly infringed
0 Votes
+ -
@ddrmueller
Axsimulate 22nd Feb 2010
If you bothered with facts you would see that Apple was trying to license Nokia's technology, however Nokia is not playing by the rules of the standards committee and charging variable license fees. Nokia is simply trying to extract (extort?) more money from Apple than others. It is very clear that Nokia is refusing to show in good faith that they are charging the same across the board. If Nokia is being honest, what do they have to hide?
0 Votes
+ -
Actually...
msalzberg Updated - 22nd Feb 2010
Apple is alleging that Nokia wants the rights to use the Apple iPhone UI,
which, of course, is not something they're demanding from other
companies.
0 Votes
+ -
@msalzberg
Axsimulate 22nd Feb 2010
Yes, I see that, that is clearly not part of a fair and reasonable license.
0 Votes
+ -
Delete
Fark Updated - 22nd Feb 2010
OOPS.
0 Votes
+ -
RE: Smartphone wars: Apple fires back at Nokia; Court skirmishes heat up
Socratesfoot Updated - 22nd Feb 2010
Wish we could just force split all these big companies in half and quarters making them split the patents they own between smaller subsidiaries. Then there would be competition again. I can think of a lot of things that would be solved if regulators would threaten to "cut the baby in half" every time two big players took a battle to court. It worked for King Solomon.

Join the conversation!

Formatting +
BB Codes - Note: HTML is not supported in forums
  • [b] Bold [/b]
  • [i] Italic [/i]
  • [u] Underline [/u]
  • [s] Strikethrough [/s]
  • [q] "Quote" [/q]
  • [ol][*] 1. Ordered List [/ol]
  • [ul][*] · Unordered List [/ul]
  • [pre] Preformat [/pre]
  • [quote] "Blockquote" [/quote]
ie8 fix

The best of ZDNet, delivered

ZDNet Newsletters

Get the best of ZDNet delivered straight to your inbox

Facebook Activity

Blog Roll

Blog Archive

White Papers, Webcasts, & Resources
ie8 fix