In countersuit, Apple says Nokia missed paradigm shift and therefore ‘chose to copy the iPhone’

“In Apple’s countersuit today, it accuses Nokia of attempting a ‘patent hold-up.’ The patents in question are part of industry standards, and as such Nokia must license them under fair and reasonable terms, argues Apple. But instead, Nokia tried to put the squeeze on Apple,” Erick Schonfeld reports for TechCrunch. “Apple states in its countersuit:”

In dealing with Apple, Nokia has sought to gain an unjust competitive advantage over Apple by charging unwarranted fees to use patents that allegedly cover industry compatability standards.

Schonfeld reports, “Whether or not Apple’s arguments hold water is for a court to decide. But Apple takes the opportunity of this legal battle to make a swipe at Nokia as a flailing competitor. If you read between the lines of the suit, the reason Nokia is not willing to license its patents under ‘fair, reasonable, and non-discriminatory terms’ to Apple is because while Apple was creating a ‘revolutionary change in the mobile phone category’ with the iPhone, Nokia was sitting on its haunches:”

In contrast, Nokia made a different business decision and remained focussed on traditional mobile wireless handsets with conventional user interfaces. As a result, Nokia has rapidly lost share in the market for high-end mobile phones. . . . In response, Nokia chose to copy the iPhone.

Schonfeld reports, “In other words, Nokia is losing in the marketplace so it is falling back on the only thing it has left—its patents.”

Full article here.

MacDailyNews Take: Now, what was that we said the day Nokia filed suit against Apple? Oh, yeah: “Can’t compete? Litigate.”

It’s not as if Nokia et al. haven’t been warned:

We’ve been pushing the state-of-the-art in every facet of design… We’ve been innovating like crazy for the last few years on this and we’ve filed for over 200 patents for all of the inventions in iPhone. And we intend to protect them.Apple CEO Steve Jobs unveiling iPhone, January 9, 2007

It’s difficult to judge products that are not yet in the market, but iPhone has sold over 17 million units thus far and has received the highest user satisfaction in multiple independent surveys. We’re years ahead on software and that includes the App Store. We approach this business as a software platform business unlike many who approach it as a hardware product. We like competition as long as they don’t rip off our IP, in which case we will go after them. We will not stand for having our IP ripped-off and we will use any weapons at our disposal [to stop it].Apple COO Tim Cook, January 21, 2009

17 Comments

  1. Patently understand is why, if Apple has all those special patents, nobody has gotten sued yet for copying them? After all, in the CEO’s original presentation of the iPhone, he said they had over 200 patents on this new device, which led to belief that copying the iPhone would involve using some of those patents. Had Apple’s legal people not looked into the industry patents at the time and incorporated some in their plans for the iPhone? And how well is the iPhone design protected by Apple’s over 200 patents? Questions, no answers. Yet.

  2. @ Fred,

    Thanks for the link. That is hilarious. “Mess with the bull and you get the horns.” So true. If you are suing Apple or any company at all you better have three things. Proof, a ton of money for legal fees and then even more money for if you win you can make it through the appeals process.

    As a big company being sued by a big company you do one thing only, file counter suit. This isn’t going to win anything for Nokia, spending money while you are losing money will only make certain one thing, you have less money.

  3. Nokia: But Ballmer said this works: Get a monopoly position anyway you can, then ride it for two decades before having to innovate anything new.
    Customer: You lose.

  4. This seems to have started, as stated in the article, over the price that Nokia wants for licensing some patents they have. For technology giants, they file lawsuits, which results in discovery, maybe some partial judgments, and an eventual mutual deal on licensing each other’s property.

    My bet is a deal is more probable than a trial and eventual judicial verdict.

  5. Seems like people should read the complaint.

    On page 41, paragraph 82 and 83 are very interesting. There, Apple states that in May of 2009,

    “Nokia demanded a royalty approximately three times as much as the royalty proposed the prior spring, which was itself in excess of a F/RAND rate, as well as “picks” to Apple’s non-standards-essential patents.”

    F/RAND, is the acronym for Fair, Reasonable and NonDiscriminatory terms. Nokia agreed to F/RAND compensation when its “essential patents” were proposed accepted as part of a standard by the standards body.

    So, if Apple is correct, then Nokia not only wanted a far higher royalty rate than they charge others, but that they wanted to leverage those patents to force Apple to cross-license some Apple patents that they wanted to use, and were already using. If correct, this is highly damaging to Nokia.

  6. @patentlyharry
    If/when the competition finally delivers a product that doesn’t come off like a poorly-timed joke with no punchline – one which infringes on any of the Apple patents – you can bet that will change.

  7. In addition to providing analysts something stupid to say about what Apple should buy, I think one of the reasons they keep such a volume of cash on hand is to show off the size of their gun rack to potential litigants.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.