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Nokia Sues Apple Over Patent Infringement

Posted on: Thursday, 22 October 2009, 16:00 CDT

Nokia, the world’s largest mobile phone maker, filed a lawsuit against rival Apple Inc. on Thursday for infringing upon 10 of Nokia’s mobile phone technology patents.

The Finland-based company filed its complaint in a federal district court in Wilmington, Delaware, claiming that all of Apple’s iPhone models use Nokia’s technology for wireless data, speech coding, security and encryption. The lawsuit seeks back royalties on the 33.7 million iPhones that have shipped since Apple launched the devices in 2007.

Nokia said some 40 handset vendors have licensed its mobile phone technologies.  In its lawsuit, the company said it had attempted to license the technology to Apple, but that Apple “refused to compensate Nokia.”

"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," said Ilkka Rahnasto, deputy head of Nokia's legal department, in a statement.

Nokia said it had invested $60 billion (40 billion euros) in research and development over the past 20 years.

"The ten patents in suit relate to technologies fundamental to making devices which are compatible with one or more of the GSM, UMTS (3G WCDMA) and wireless LAN standards," Nokia said.

The suit is not the first time Nokia has initiated a court battle against a rival to protect its patents, according to analysts.

"This does not come as a surprise. Nokia has likely been negotiating with Apple since it revealed the iPhone and has failed to reach an agreement," said Ben Wood, director of research at CCS Insight, in an interview with the AFP news agency.

Apple has “sold dozens of millions of phones, and if they haven't paid the patents it could be a several billion euro deal or at least hundreds of million euro deal," Redeye analyst Greger Johansson told the AFP.

Nokia posted its first quarterly loss in a decade earlier this month, results that some attribute to the increasing popularity of rival devices such as Apple's iPhone and RIM's Blackberry. The company lost $840 million (559 million euros) in the July-September quarter amid a nearly 20 percent decline in sales compared with the previous year.

The company said last week that its global market share for mobile devices remained at 38 percent.  However, its market share for smartphones dropped to 35 percent during the third quarter, down from 41 percent in the previous quarter.

Some analysts say the company has failed to improve its smartphone portfolio enough to entice customers to choose Nokia models over an iPhone or Blackberry.

Shares of Apple’s stock were up 28 cents, or 0.14 %, closing at $205.20 on Thursday.
 
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Source: RedOrbit Staff & Wire Reports

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