Nokia files a patent suit against Apple, claiming iPhone is getting 'a free ride'
Filed under: Company News, Technology, Investing, Nokia, Research In Motion, Apple, Palm
Nokia, the Finnish cell-phone giant, filed a lawsuit against Apple on Thursday, claiming that Steve Jobs & Co. haven't paid up for technology used in Apple's hugely successful iPhone. Filed in Federal District Court in Delaware, the suit involves patents for technologies including GSM, UMTS and wireless LAN (WLAN) -- all standards used in wireless phones. Nokia licenses these technologies to other companies but claims that Apple has never paid for the right to use them."By refusing to agree to appropriate terms for Nokia's intellectual property, Apple is attempting to get a free ride on the back of Nokia's innovation," Ilkka Rahnasto, Nokia vice president for legal and intellectual property, said in a statement.
Nokia's (NOK) lawsuit comes while the company is taking a beating in the U.S., as mobile innovators like Apple (AAPL), Research in Motion (RIMM) and Palm (PALM) have moved forward with smart-phone design and software. Just a few days ago, Verizon Wireless, the largest mobile provider in the U.S., launched a formidable ad campaign to unseat the iPhone with its new device, the Droid, which runs Google's open-source mobile operating system, Android.
"As a leading innovator in wireless communications, Nokia has created one of the strongest and broadest patent portfolios in the industry, investing more than EUR 40 billion in R&D during the last two decades," the company said in a statement.
"Much of this intellectual property, including the patents in suit, has been declared essential to industry standards. Nokia has already successfully entered into license agreements including these patents with approximately 40 companies, including virtually all the leading mobile device vendors, allowing the industry to benefit from Nokia's innovation."
Nokia is the world's largest cell-phone maker, but it has fallen on hard times lately. Last week, it shuffled its management team one day after reporting a $836 million loss, thanks to a decline in its smart-phone market share as well as other charges.
In the wake of Nokia's third-quarter beating, Moody's Investors Service lowered its credit rating for the company from A1 to A2, saying the cell-phone market "will become more challenging for Nokia as a result of its more modest long-term growth and more formidable competition in the attractive segments of the market."
Gene Munster, an Apple analyst at Piper Jaffray, says Nokia appears to be aiming for a settlement from Apple, presumably for a hefty chunk of change. "We believe that Nokia is not seeking an injunction; rather, we believe that the company has been in talks with Apple concerning a patent royalty payment for over a year," Munster wrote in a note to clients.
He added: "With today's announcement, it appears that the companies have not come to a resolution and Nokia is attempting to hasten the process. Nokia is likely looking to obtain a patent royalty of 1 percent - 2 percent ($6 to $12) on every iPhone sold in compensation for its [intellectual property] concerning GSM, 3G and WiFi technologies on mobile devices." Apple did not immediately return a request for comment.
Apple reported blowout earnings this week that shocked even bullish Apple watchers. Knowing Steve Jobs' near-fanatical sense of brand identity and fierce competitive streak, it's hard to see Apple throwing up the white flag and bowing to Nokia's demands. In other words, this could get ugly.
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Reader Comments (Page 1 of 2)
10-22-2009 @ 7:00PM
Average White Boy said...
You can always tell when a company is starting to lose a lot of money. They start getting desperate and go after any company that has money. Nokia could have said something to Apple years ago before the iPhone became popular and threatened their existence. Now Nokia thinks Apple will be easy pickings. Good luck, Nokia. Apple's $32 billion dollars in reserve cash will buy them a lot of lawyers and probably mire Nokia in the courts for years.
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10-23-2009 @ 9:58AM
Jim said...
What a dumb comment. Nokia is going after Apple because they are hurting for money? Nokia developed the technology that Apple is using, and they have patent on the intellectual and development rights to this technology. If Apple steals this, then they need to pay. ALL other phone makers are paying up for the use of this technology, so why the hell should Apple be any different? One of the biggest problems in the computer world these days is the ignorant devotion to Apple and it's brand name. Where they USED TO have the world by the balls for the graphics capabilities of their computers, they now have to face PC computers that can not only keep up but far surpass the graphics capabilities of the Apple computers. I would say that Apple is the company with so much to lose these days. As for Nokia, I say they should rip Apple a new one. Theft is theft.
10-23-2009 @ 12:08PM
Sekinu2 said...
Guess your not to smart as apple had to get permission before they sold the first iphone to use this tehnologoy and what has happened is apple tried to just not pay and honor the contract. I wouldnt call Nokia desperate figure what 5 million iphones at $12 each owed... If someone owed you that much money for using your ideas and technology and told you screw off we're not paying you your not gonna go after your billions?
10-23-2009 @ 7:25AM
The Dude said...
Tough for Nokia, for years the Jap's and Europeans and , hell, anyone and everyone stole American technology and the attitude was so sue me. The Jap's especially stole almost every invention made in the United States, made exact copies with backing from their Government sold them at insanely low prices until all American electronic companies were out of business. American companies pleaded and begged Regan to stop this insanity and the complete destruction of an entire American industry, but it all fell on deaf ears and now, the former gigantic American Electrobic's industry is gone, they did the same with cars, are trying with motorcycles, but sorry slope, A Harley Davidson is a Harley Davidson and you won't win tht one with your copies of Harley design's, your desperate attempt's to destroy an American icon will never work. So screw Nokia, American industry was devestated by Japanese thievery foe decades and the court's and the American Government let it happen, of course under republican rule. That is the same problem today, why do the republicans hate the middle class, Bush nearly wiped out the American middle class in just eight years, now Chin and India have huge middle classes where none existed eight short years ago. When will these incompetent moron's realize that without yhe American working and middle classes, their is no America.
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10-23-2009 @ 10:02AM
Paul Rawlins said...
Republicans built the middle class dude, Obama and his buddys are wiping out the middle class, sure you will have freebies with the dem's but less of everything ...like quality health care why do you think that the dem's in congress will not be on the same plan that they are making for you, because they do not want to pick a numbver and stand in line and wait to die. About Regean, he built the mdidle class up to its highest point, more people could buy more then ever before in history of the USA, the dem's forcing the banks to make loans to people who couldn't pay them back busted the bubble not Bush, and that law was passed under Clinton, not Bush.....love these liberals they just make stuff up as they go ignoring the facts'.
10-23-2009 @ 9:12AM
John said...
Don't blame the Jap's, the American people sold themselves out by all this imported stuff. That's why we're getting poorer and poorer.
10-23-2009 @ 11:01AM
lhgraphics said...
Industry didn't die because foreign companies stole patents. American Industry died because companies could build and operate plants overseas cheaper than building and operating them in the USA. No unions, low wages, no perks like retirement plans and health insurance. Few government regulations and no taxes also make it easier to produce overseas.
10-23-2009 @ 11:46AM
jason said...
Uh why exactly would the Republicans (the party of the rich exclusively we're told) want to destroy the middle class when Americans citizens, now pushed into the proletariat, have the power to steal the wealth from the rich through graduated taxation? Seems to me like a party dedicated to protecting the rich would want a strong and healthy middle class to offer a buffer between their wealth and the theives operating under the guise of being progressive. Er, um, uh... Well it sounds a whole lot more logical when your union bosses are shouting it at the meetings doesn't it.
10-23-2009 @ 2:19PM
gr8bsn said...
Nokia is from Finland, not Japan.
10-23-2009 @ 2:43PM
alienanthropologist said...
It's not called stealing. It's called reverse engineering. It's how the Land Cruiser was born. The Japanese brought back a Willy's (predecessor to the CJ-7) when the US was fighting in the Philippines, took it apart and accordingly designed a sturdier model.
Chrysler did the same to design and build the Neon using a Corolla as their starting point.
Also - as far as I can tell, the only time the US was ever a world leader in manufacturing was when Europe (ie. Germany) and Japan were either busy at war or busy rebuilding after a war. As soon as peace was established, they kicked our butts.
10-23-2009 @ 4:50PM
Anonymous said...
It maybe true that the Japanese took our old technology but they built over it and innovated them more. Didn't you know that the iPhone here is much crappier compared to cell phones in Japan. Before the iPhones came out, Japan 5 years before that iPhone went into the U.S. market. They were already using that technology with the touchscreen and such due to their high technology. It's due to them having more time on their hands then us in the U.S. and it's true. Who could come up with batteries using urine to recharge them? Japanese people have too much time on their hands these days.
10-23-2009 @ 8:05AM
Nicole said...
Ok so yeah if apple is supposed to pay Nokia they should, you can't try on clothes to see if they fit and then take them home with out paying, but you can't blame all of Nokia's money troubles on apple. I'm a big Twilight fan I live in the states and all I can say is Nokia dropped the ball big, BIG time! Their product made an apperance in the movie and it's identifiable you can tell it's a Nokia and if you're savy enough you can track down the style (I did) - however this product is not avaliable in the US! The last time I checked they had no plans either of releasing it in the states!! Humm you wonder if they live in a bubble or if they've actually picked up a paper and seen the kind of draw Twilight holds? Just think about all the tween, teen and young adults who would love to own "Belle's" cell phone! I'd love to own it - and I'm a full grown adult!
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10-23-2009 @ 8:24AM
doktarbob said...
let me see , Nokia alledges Apple has not paid them what thay owe for patented tech. Who would believe in these wonderful times that Apple would do such a thing. ME FOR ONE! I have friends who used to work for Apple/ Mac and if they way they completely ripped off employees on severance and stocks is any indication then I hope they have to pay and pay penalties and possibly pull items from the market giving full refunds. Stealing is still stealing and last I heard it was still not legal to do so.
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10-23-2009 @ 10:25AM
Adam said...
Gee, what a surprise. Apple stealing from and/or screwing over another company? I wonder if they make an app for liquidating funds to offshore accounts in emergency situations?
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10-23-2009 @ 11:15AM
VettyB said...
Theft is Theft! We cannot blame others for our mistakes. You can cover the darn dinosaur paint it purple and dammit it is still Barney! (Ok I just gave myself a nightmare!) Apple has always been creative and innovative. iPhone is a good phone, but if you created the product by using someone else's technology you have to pay. There is no lame excuse about US being Americans and that is why we are owed a right to steal that is a cheap shot. WE fought to win our rights through tough wars! And our economy may suck but are not going to use excuses and sit on our buts to blame others! Justice is Justice Worldwide. Apple Pay up!!!
10-23-2009 @ 11:54AM
sidexshowxlette said...
blah blah blah
do they seriously have nothing better to put in the news? like for real this is of no rellivance to the world. so what happens? apple pays nokia some money. and thats the end they cant go around and take the iphones away from the people who have them they would have to reimburse the money for the phone and replace them with a different one like this so rediculous.
and ive personally never liked nokia phones. except the really really old ones that you can get like cheap at the pawn shop cause if you drop them in water they start to spark and stuff its sweet lol
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10-23-2009 @ 2:23PM
gr8bsn said...
Get an Android phone.
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10-23-2009 @ 2:30PM
gr8bsn said...
This story is great! It makes me jump up and cheer! For too long, I have gotten sick and tired of Apple worshipers droning on and on about how perfect, holy, and ethical their company was. All they could talk about was big evil Microsoft! Meanwhile, facts are facts. Want an Iphone? You're forced to use AT&T (unless you "crack" the phone, then bye bye warranty). Want an MP3 player that has industry standard accessories? You're buying Apple. Need to change the batteries in your Iphone or Ipod? Mail it in and wait...
Need to install Itunes onto your computer? You'd better back up all your old music onto some kind of external drive first because Itunes will hijack the whole collection.
Open source software for Apple? HAHAHAHAHAHAHAHA! Apple has managed to get away with this for so long by targeting quasi-liberal hipsters and ultra slick packaging. Still, the game is up and I'm not smoking what they're passing me anymore. They're out to crush the competition like anyone else.
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10-23-2009 @ 2:47PM
thealienanthropologist said...
I have to agree with you. I lived overseas for a few years and had to buy a phone for the first time in my life (before that, I just took the freebie that my telephone company offered).
When I researched I found Nokia had the best products around.
Upon returning to the States I was amazed by the lack of models available by Nokia here. In Europe, the Middle East and Asia, if you want to buy a durable multifunction telephone - no questions asked - Nokia is the way to go.
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10-27-2009 @ 3:21PM
BeauregardRippey said...
Rather ironic, considering Nokia is refusing to pay Interdigital Communications for the use of IDCC's patented 3-G technologies (I believe they still owe for use of IDCC's 2-G patents also), and is fighting IDCC in front of the ITC.
At least Apple paid IDCC for use of their intellectual property.
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