Apple Countersues Nokia, Accuses Company of Theft

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Apple announced Friday a countersuit against Nokia that accuses the company of violating 13 Apple patents. In a statement, Apple went further and accused the company of theft.

Bruce Sewell, General Counsel and senior vice president for Apple, said in a statement, "Other companies must compete with us by inventing their own technologies, not just by stealing ours."

In its announcement, Apple didn't specify which 13 patents it felt were violated, but analysts and pundits have been speculating since Nokia first sued Apple that the latter would want to sue Nokia for violating multitouch gesture-related patents.

The ruckus between the two companies began in October of 2009 when Nokia sued Apple for infringing upon 10 of its own patents covering UMTS, GSM, and WLAN (WiFi).

"Companies who contribute in technology development to establish standards create intellectual property, which others then need to compensate for," Ilkka Rahnasto, Nokia's Vice President of Legal & Intellectual Property, said at that time. "Apple is also expected to follow this principle. By refusing to agree appropriate terms for Nokia's intellectual property, Apple is attempting to get a free ride on the back of Nokia's innovation."

Analysts such as Maynard Um of UBS said at that time that Nokia's suit was likely a preemptive strike against Apple, as Nokia was concerned about Apple's multitouch gesture patents. Niokia has introduced smartphones in response to the iPhone with similar interfaces, and Apple has secured many patents covering the way mutltitouch gestures work on a touchscreen interface.

Comments

Bosco (Brad Hutchings)

And after 18 months of posturing and filing, the two companies will enjoy a hot weekend of make-up sex.

Khaled

or settle out of court smile

Laurie Fleming

But will they promise to still love each other in the morning?

John Martellaro

Nokia will become increasingly unhappy that they started this fight.

daemon

All Things D has the patent list. And the counter suit claim.

This court case is going to cost Apple more than just paying the ridiculously low royalties that Nokia was asking. The only way this could be stupider for Apple is if Nokia was donating all of their royalties for cell phones to orphanages.

brett_x

An alternative viewpoint to this battle can be found here;
http://www.roughlydrafted.com/2009/12/11/the-real-patent-story-behind-apple-vs-nokia/

Terrin Bell

I read Apple’s response, and I think Apple has a great case. First, Nokia is required to license it’s technology for a reasonable rate to members of the standards body it and Apple belongs to. Apple will argue Nokia is charging it more then other members like Sony. If Nokia is charging Apple more then other members, which is likely the case (or Apple would have paid up), Apple seems to have a strong argument.

Second, Apple’s patents have nothing to do with the standards body Nokia and Apple belong to and as such Apple isn’t required to license anything to Nokia. So, Nokia cannot argue that Apple is required to license it’s patents, and it’s only defense will be to try to either invalidate the patents or show it isn’t infringing them.

I see this being settled, but on favorable to terms for Apple.

daemon

I read Apple?s response, and I think Apple has a great case. First, Nokia is required to license it?s technology for a reasonable rate to members of the standards body it and Apple belongs to. Apple will argue Nokia is charging it more then other members like Sony. If Nokia is charging Apple more then other members, which is likely the case (or Apple would have paid up), Apple seems to have a strong argument.

Terrin, the damages that Nokia has asked for have been characterized as “chicken feed” by more than one industry analyst, and not one of them has suggested that Nokia was trying to gouge Apple. Simply put, your arguement that Nokia was trying to charge an unreasonable rate in royalties to Apple is spurious.

Second, Apple?s patents have nothing to do with the standards body Nokia and Apple belong to and as such Apple isn?t required to license anything to Nokia. So, Nokia cannot argue that Apple is required to license it?s patents, and it?s only defense will be to try to either invalidate the patents or show it isn?t infringing them.

The patents that Apple is counter suing upon are widely varied and are not clearly linked. Assuming the patent involving serial data communication was never pooled with the other USB patents when the standard was developed by Apple and the other members of the USB Implementers Forum Apple could leave themselves vulnerable to having their patents nullified much like Rambus had theirs nullified after failing to declare them during the JEDEC standards conference for DDR.

Apple’s counter-suit has significantly muddied up this proceeding and I doubt that it will save the company any money and will likely cost them much more to fight this than paying the royalties that Nokia initially requested.

Terrin Bell

Strange, I did a Google search for “Nokia, Apple, and Chicken Feed.” The only result I got back is a previous post you made on this website. You’d think if the over all consensus was that Nokia’s request to Apple for licensing fees was chicken feed, there’d be a few top links to those sources. More importantly, chicken feed is a subjective label that in this context has to do with Apple’s ability to pay. The criteria, however, is not whether or not the fees are easy for Apple to pay, but whether the fees are fair, reasonable, and indiscriminate.

The reality is you nor I, have any clue what Nokia was asking for in terms of licensing fees. It claims it has licensed the patents at issue to over forty companies. Perhaps, that is true. Yet, Nokia is also required to not engage in discrimination in terms of it’s licensing terms. So, perhaps Apple’s grievance is one of discrimination. Maybe, Nokia wants more from Apple then others. Nokia, Motorola, and Sony have cross licensing agreements whereby those parties use the other’s technology for free in order to create a standard.

Apple hasn’t shied away from licensing other’s technology in the past.  Apple licensed Erickson’s patents for the iPhone. Apple licenses Microsoft Exchange. Apple also pays for technology it wants.

Moreover, when Nokia’s story first hit the news, some so called experts where suggesting Nokia was probably only asking for millions. Others then suggested it was asking for billions. Both millions and billions, Apple can pay. The issue, however, is what are fair, reasonable, and indiscriminate terms.

Considering these various factors and both of our lack of real knowledge, your claim that my position is spurious seems otiose don’t you think?

Terrin, the damages that Nokia has asked for have been characterized as ?chicken feed? by more than one industry analyst, and not one of them has suggested that Nokia was trying to gouge Apple. Simply put, your arguement that Nokia was trying to charge an unreasonable rate in royalties to Apple is spurious.

Terrin Bell

I will not pretend to understand the complete ramifications of all Apple’s patents it claims Nokia is violating. I, however, think Apple makes a compelling argument in it’s answer and counter complaint. Further, it is unreasonable to think that a company as rich in computer related patents as Apple, over two hundred related just to the iPhone, does not have an arsenal big enough to hold it’s own against Nokia who publicly has bragged about proudly copying Apple’s ideas.

Further, I find it interesting that I cannot remember a time when Apple last initiated a patent related lawsuit without being sued first. OK, a take that back, Apple recently initiated one for a company borrowing it’s unique power cords ideas thereby displacing Apple sales of such replacement adapters. That is like one in the last ten years though.

Apple seems to mostly hold it’s patents for strictly defense purposes, when many companies are likely currently borrowing it’s patents without it’s permission.

The patents that Apple is counter suing upon are widely varied and are not clearly linked. Assuming the patent involving serial data communication was never pooled with the other USB patents when the standard was developed by Apple and the other members of the USB Implementers Forum Apple could leave themselves vulnerable to having their patents nullified much like Rambus had theirs nullified after failing to declare them during the JEDEC standards conference for DDR.

Apple?s counter-suit has significantly muddied up this proceeding and I doubt that it will save the company any money and will likely cost them much more to fight this than paying the royalties that Nokia initially requested.

daemon

Apple seems to mostly hold it?s patents for strictly defense purposes, when many companies are likely currently borrowing it?s patents without it?s permission.

Defensive? As in only enforced when they decide to infringe on another company’s IP rights in an attempt to avoid paying for fair compensation?

Look, the Nokia patents are undisputed as being vital to GSM standards, there is no GSM phone that can operate without using Nokia’s 10 patents. Apple’s 13 patents seem rather confusing and murky as to just how Nokia has infringed any of them. Like I said before, they cover a wide verity of subjects (one actually patents themes! You remember how Jackie Kenedy went into the White House and redecorated the rooms by theme? Yeah, Jackie O owed Apple for patent infringement, that’s why she’s dead now) and none of them seem to have a unifying element other than Apple’s lawyers paniced and are desperate to prove they’re worth the millions of dollars Apple blows on them a month!

Mark my words: Apple will not save any money by going to court over this, they will spend millions of dollars in litigation and likely end up still paying Nokia’s ridiculously tiny royalty of $12 a phone.

Bosco (Brad Hutchings)

@daemon… Terrin’s book report of Roughly Drafted can be quickly summed up as “Apple only does good and everyone else is bad”.

The question for 2010 will not be whether Apple is a software company or a hardware company. Nor will it be whether Apple is a computer company or a music company or a phone company. It will be whether Apple has become a lawsuit company.

Terrin Bell

Actually, my source was allthingsdigital, which posted Apple’s response and counter complaint. Unlike what I suspect you did, I actually read Apple’s filing. I guess, however, roughlydrafted is taking the common sense position as well. Good for it. Maybe next time you could provide us a link with the website I am allegedly doing a book report on.

Let us set that aside though. Since you obviously are aware of the fair, undiscriminatory, and reasonable licensing terms that Nokia is offering Apple, please enlighten us. I have searched the internet, and I am missing those terms. Moreover, tell me how granting a license to 40 or so companies without asking for cross licensing of the licensees’ patents is undiscriminatory if it is in fact asking Apple to cross license Apple’s unrelated patents as a condition to license Nokia standard patents?  With your obviously superior intellect to my own, and your access to inside information, this should be truly educational.

Further, common sense dictates that Apple isn’t trying to get away without paying Nokia anything. It just wants similar terms to others, and doesn’t want to cross licensee it’s patents.

Last I checked, Nokia filed the lawsuit. Apple is responding.

@daemon? Terrin?s book report of Roughly Drafted can be quickly summed up as ?Apple only does good and everyone else is bad?.

The question for 2010 will not be whether Apple is a software company or a hardware company. Nor will it be whether Apple is a computer company or a music company or a phone company. It will be whether Apple has become a lawsuit company.

Terrin Bell

Again, you are failing to point out what fair compensation might be or providing any legitimate sources that might give us a clue. More importantly, you aren’t explaining how it is fair to license Nokia’s patents to 40 or so other companies without demanding those companies to provide access to their own patents, while wanting access to Apple’s patents as a condition to license the same patents. Both Nokia and Apple are members of the European Telecommunications Standards Institute. Nokia is required to grant access to fellow members of the patents at issue on the same terms as everybody else. It can’t place additional requirements on Apple by demanding access to Apple’s patents not part of it’s ETSI portfolio.

Yet, that is what Apple is claiming that is Nokia is doing. If Apple is correct in this regard, I see Nokia losing. Nokia must license to Apple the patents on the same terms as others.

Moreover, I didn’t dwell too far into the patents that Apple is claiming Nokia is violating because the complaint doesn’t go into great detail on how Nokia is violating them, other then stating what Nokia phones are infringing. Many deal with processing, which I do not thoroughly understand. Interestingly enough though, Apple is claiming in addition to the Apple named patents that Nokia is allegedly violating, Nokia is also violating other pending patents. One pending patent is the ability to unlock the phone with a swiping gesture. That seems pretty simple to understand to me. Further, if Amazon can be granted a patent for one click shopping, Apple can be granted a patent for the sliding unlock function on the iPhone, and Nokia did in fact borrow that idea from Apple.

I think Apple there will be a settlement where Nokia gets to use some or all of Apple’s patents, but Apple has access to Nokia’s patents for free. In other words, some sort of cross licensing deal. If so, that is a win for Apple. Like the Psystar case, both Apple and Nokia are banking on pre trial motions to get the upper hand in settlement negotiations.

Defensive? As in only enforced when they decide to infringe on another company?s IP rights in an attempt to avoid paying for fair compensation?

daemon

Again, you are failing to point out what fair compensation might be or providing any legitimate sources that might give us a clue.

BBC story about Nokia asking for 1 - 2% royalty on all iPhones sold, which comes out to $6 to $12.

you aren?t explaining how it is fair to license Nokia?s patents to 40 or so other companies without demanding those companies to provide access to their own patents

Engadget story about Nokia’s patents and the fact that all of the members of GSM standards body cross license their technolgies between each other.

Nokia must license to Apple the patents on the same terms as others.

If you had bothered to do a search via google you would have found that Nokia does enter into cross licensing agreements with other companies that have patent portfolios.

I think Apple there will be a settlement where Nokia gets to use some or all of Apple?s patents, but Apple has access to Nokia?s patents for free.

Considering how little Nokia is asking for royalties, I can’t say that isn’t a real possibility. But it doesn’t change the fact that this court case is stupid for Apple.

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