Why Nokia is suing Apple over iPhone GSM/UMTS/WLAN patents and what’s really at stake

12 Black Fridays of the Season“Nokia has filed suit over patent infringement on Apple’ iPhone, claiming that ‘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.’ Actually the reverse is true,” Daniel Eran Dilger writes for Roughly Drafted.

“As the world’s leader in handset sales by a wide margin, Nokia most certainly does have one of the ‘strongest and broadest patent portfolios in the industry,’ as the company says. And having licensed its technology to nearly every mobile maker in the industry, it’s not surprising that Apple will have to pay Nokia to play in the phone market,” Dilger writes.

“However, Nokia is painting a picture that doesn’t doesn’t really mesh with reality, suggesting that Apple is a rogue manufacturer intent on breaking patent laws,” Dilger writes. “In reality, Apple maintains one of the most experienced legal teams in the field of intellectual property, knows how the industry works, and either pays for IP or proves that it doesn’t need to.”

Full article here.

Ashby Jones blogs for The Wall Street Journal, “It’s a fact of life that litigation is often used as a business tool — a set of flashing lights to get a competitor to sit up and take notice, or a cudgel to bring a more powerful company to the negotiating table. Analysts say such could be the case with Nokia here.

“‘I really think this is more a function of Nokia trying to compete with Apple more than anything even if it’s through the courts,’ said Shaw Wu, an analyst with Kaufman Brothers, adding that Nokia may be taking action now because the iPhone is starting to gain ground in Europe and Asia,” Jones reports. “‘It’s a non-event for Apple. It’s immaterial even if they pay a lump sum,’ he said.”

Jones reports, “Maybe so. But the NYT writes that the potential return to Nokia could be enormous. Typically, the royalties for essential patent portfolios in cellphones make up 1 percent to 2 percent of the wholesale price. The wholesale cost to wireless carriers of the iPhone is estimated to average about $600. A 2 percent royalty would represent $12 for each phone sold. In just the most recent quarter, Apple sold 7.4 million iPhones. It has sold more than 34 million total.”

Full article here.

MacDailyNews Take: Can’t compete? Litigate.

27 Comments

  1. Apple should not have to pay a percentage on the full price since the unit is multipurpose. They should pay royalty on the phone component or whatever part the patents cover.

  2. I was thinking about having eggs and bacon for breakfast but then I got a notice from Yesterday’s TowerTone that he had thought of the same thing first….at least that’s what Tomorrow’s TowerTone told me today.

    So I sued Tomorrow’s TowerTone and settled with Yesterday’s….

  3. Or, perhaps Nokia will try to use this to negotiate a cross-licensing deal for some of Apple’s patents. Then neither side pays money, and Nokia can do some things no one other than Apple can do. Very common thing for two corporations with big patent portfolios – they both infringe the others, so they cross-license. Nokia would benefit from that big-time, most likely.

  4. @ Krioni,
    You are partly correct. Nokia IS suing, but not just for cross licensing rights, but BECAUSE Apple REFUSED to cross-license their IP to Nokia.
    Nokia is painted into a corner right now because Apple has the stronger patent portfolio (Handset technology patents) going FORWARD. Since it’s obvious Apple has the patents on touch screen technology, and that is a hot ticket for phones, Nokia would have to license it from Apple and they aren’t playing ball the way Nokia wants them to. So, as MDN said before, when you can’t compete, litigate. Apple’s share of IP infringement is a drop in the bucket compared to the amounts they will make if and when their competitors start infringing on their IP patents.

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