Apple Settles iPhone Patent Lawsuit with Nokia

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The two year patent lawsuit battle between Nokia and Apple has finally ended with Apple agreeing to pay Nokia an unspecified amount in licensing fees. The agreements brings to a close all of the patent related legal claims from both companies, and both sides are dropping their International Trade Commission complaints, too.

As part of the settlement, Apple is paying Nokia a lump sum, along with ongoing royalty payments. Nokia isn’t saying how much money Apple is shelling out in the deal, or how long the iPhone and iPad maker will be paying licensing fees.

Apple v Nokia: In the canApple and Nokia settle their patent claims

Stephen Elop, Nokia president and CEO, did say he’s glad the patent lawsuit has been settled.

“We are very pleased to have Apple join the growing number of Nokia licensees,” he said. “This settlement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.”

Nokia filed a patent infringement lawsuit against Apple in October 2009 over claims that the wireless technology the company uses in most of its products, such as the MacBook and MacBook Pro, iPhone and iPad, violate patents the cell phone maker owns. Apple fired back with its own lawsuit against Nokia in December that same year for allegedly violating several patents it owns.

Both companies also filed complaints against each other with the ITC.

Apple’s General Counsel and senior vice president, Bruce Sewell, underscored the tension between the two companies when he commented “Other companies must compete with us by inventing their own technologies, not just by stealing ours.”

While the settlement lets Apple free up some of its legal resources for other court battles, Nokia stands to be the big winner as it moves forward with its patent licensing hunt.

“The fact that Nokia has demonstrated its ability to defeat Apple — after the most bitterly contested patent dispute that this industry has seen to date — is a clear proof of concept,” said Florian Mueller at Foss Patents. “Other companies whom Nokia will ask to pay royalties will have to think very hard whether to pay or pick a fight.”

Nokia’s good news may turn out to be bad news for Android phone makers, too. “Given that Android is in many ways a rip-off of Apple’s operating software, Android-based devices are highly likely to infringe on largely the same Nokia patents that Apple now felt forced to pay for,” Mr. Mueller said.

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8 Comments Leave Your Own

Tiger

As the story has little, if no detail, actually declaring a winner and loser in this battle is impossible. Did Nokia win because Apple agreed to pay? Or did Apple win because Nokia agreed to license the technology for $1 per unit versus the $10 they were asking?

It was documented all along that Apple was willing to license the technology, but were balking at the price being asked. And of course, that’s been a problem with their own tech over the years…licensing fees.

It’s what kept Quicktime from being even bigger than it was and how Windows Media was able to get as big as it did.

Sometimes, “fair market valuation” actually works!

Bosco (Brad Hutchings)

Apple?s General Counsel and senior vice president, Bruce Sewell, underscored the tension between the two companies when he commented ?Other companies must compete with us by inventing their own technologies, not just by stealing ours.?

Which is of course exactly what Apple did with Nokia’s wireless technology. This quote was especially funny, because it was probably taken seriously when he initially made it about Nokia. Subsequent copies of the quote, like when applied to the Samsung lawsuit, reek of marketing, as in “we’re innovative, you’re not, tell me how my @$$ tastes”. In reality, every recognizable player in the mobile, wireless, computing, and consumer electronics industry either has a stack of patents or easy access to a stack of patents that everyone else in these industries is violating in spades.

Is anyone here finally convinced that Apple Legal going after everyone is somewhere between mixed bag and a bad idea?

Cloggervic

Apple was very late to the cellphone market - about 2 decades late. They must be infringing THOUSANDS of patents owned by the incumbents. But it is better for them to take the initiative and sue, rather than just wait and see. The incumbents wait until the amount of Apple products out there is huge, and wait to see how blatant Apple can get with its infringement before they sue. That way Apple does not get a warning to desist until they are deep in the doodoo and the amount of accumulated royalties and possibly triple damages skyrockets. So Apple is right to provoke the patent issue early.

Will

Quote: “... Android ... a rip-off of Apple?s operating software, ... infringe on ... same Nokia patents that Apple now felt forced to pay for,? Mr. Mueller said.
Also Mueller said, ?Other companies whom Nokia will ask to pay royalties will have to think very hard whether to pay or pick a fight.?
Point made: Nokia?s good news may turn out to be bad news for Android phone makers, too. end of Quotes.

Now this is interesting. Could there be some conspiracy about? Or at least a wink between between Apple and Nokia? Certainly will be entertaining to see Nokia’s moves on Android.

With increased costs to Android manufactures for licences, what might be the fate of their fragile bottom lines?

Reminds me of mud wrestling. Lots of groping and fakery.

daemon

While there could be some sort of conspiracy between Apple, Nokia, and Microsoft to take the fight to Android, you must remember that Google doesn’t own Android, the Open Handset Alliance owns Android.

And the members of the Open Handset Alliance range from pioneering carriers to the some of the most prolific chip manufacturers on the planet.

I don’t like the conspiracy’s odds of success.

craigf

I agree that it is premature to declare a victor without more details that we may never get. It was my impression that the whole battle started not because Apple wouldn’t pay Nokia, but because Nokia was attempting to extort much higher fees from Apple than from other licensees iin violation if FRAND rules. This has nothing to do with the fact that Apple might or might not charge too much for it’s tech. It has to do with companies that agree to pool industry-critical patents and to charge fairly for them.

I think it is very possible that Apple not only got what it originally wanted, which was to pay like everyone else, but also ended up getting a settlement from Nokia for the use of some if its patents. In this case, I would consider that both sides won, but Apple won more.

Will

Apple clients have been hit with lawsuits on patents for which Apple was already paying patent licensing fees. It is the manufacturers of Android products that might be mined by patent holders (or patent trolls), I should think. For reasons daemon stated, hadn’t really include the use of open source by Google or others, but any parts of the Android OS outside Open Handset Alliance development that Google or manufacturers accesses from Apple, Nokia, Microsoft and other patent holders would surely be held accountable for patent licensing. Someone, Google, the Android based manufactures and, or software developers would have to pay the piper.

If so, those involved in Android based products and ideas that also use proprietary patents and who don’t have deep pockets would feel the squeeze more than any of the very large players such as Apple and Google.

Seems fair.

Nemo

Florian Muller is, I think, wrong.  This looks like a win for Apple.  Nokia’s goal in its several lawsuits against Apple was to first and foremost get Apple to cross license its iPhone/iPad tech or force Apple to pay prohibitive licensing fees for technology that Nokia has agreed to license to the industry on FRAND (Fair, Reasonable, and Nondiscriminatory) terms.  Nokia best infringement claims in its court and ITC actions were always Nokia’s FRAND technology, which meant that this lawsuit was always primarily about whether Nokia had breached its obligation to offer Apple FRAND terms or whether Apple had infringed by declining to pay FRAND terms but using Nokia’s FRAND tech anyway.  When framed that way, unless Nokia could get an injunction from either the ITC or the courts, this was always going to be about how much Apple would pay to license Nokia’s FRAND tech and whether that licensing would be on Nokia’s terms or Apple’s.

As the case has progressed, it appeared that the ITC wasn’t going to issue an injunction banning the import of iPhones and iPads.  It was also looking unlikely that Nokia would win an injunction from the courts, though it was too early to say for certain.  Thus, with Nokia’s other claims of infringement either having far less merit or being countered by Apple’s counterclaims of Nokia’s infringement, settlement on fair licensing terms was the most likely outcome, whether the parties reached their own settlement or had one imposed on them in the form of a court’s judgement.  Nokia, by settling, also avoided the risk that the court would find that it hadn’t offered FRAND terms and thus, was in breach that could have cost it all past licensing fees.

So the parties negotiated their own settlement rather than risk the outcome of litigation.  This made particular sense for Apple, as Nokia has apparently accepted that it won’t get any cross licensing of Apple’s iPhone tech.  And, as I said, supra, Nokia will get something—and probably a fair royalty—for Apple’s past and future use of its FRAND tech.

Also, remember that Nokia lost a lot reason to maintain this very expensive, risky, and attention diverting fight once it abandoned its own mobile OS to use Microsoft’s Windows Phone technology.  And with Nokia moving to Microsoft’s tech some of Apple’s infringement claims would be mooted for all but Nokia’ past infringement.  These reasons also moved both Apple and Nokia to settle.

But the settlement is one where Nokia isn’t getting any license to use Apple’s tech and where Apple probably isn’t paying any more than fair licensing fee for its past and future use of Nokia’s technology.  That is a win for Apple.

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