Nokia Sues Apple Over iPhone GSM Patent Infringement

patent_troll_sues_apple

Out sibling site NokiaExperts.com brings word that Nokia is suing Apple in Delware court. Why-for?

ten patents related to GSM, UMTS, and WLAN standards that Nokia states they established after investing more than EUR 40 billion in R&D over the last 20 years. Nokia stated that they have 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.

Seems other companies have coughed up the cash to use them, but Apple's waiting for a court to force their hand. With $35 billion in the bank, they can obviously afford to give a fortune away to the lawyers, but why go to the effort? Do they really think a court will somehow dismiss the patents as invalid?

Pass the popcorn, get ready for some patent pugilism, and let us know what you think!

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, Vector, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Nokia Sues Apple Over iPhone GSM Patent Infringement

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I think Nolia is dumb and Apple is greedy but I still Love My iPhone thanks to Jailbreaking tho not bcuz of apple

This bad press could have been avoided.. Apple is getting too big of a head.. they need to calm down, and prtner with some folks(or at least work with) before everyone is partnering against you.

@AG: You don't think your iPhone love has anything to do with Apple, but everything to do with JB? Really?

You infringe on someone's patent and this is what happens. I enjoy my iPhone too but if they abused a patent that I had I would pull out the big guns too.

If Apple really is infringing upon Nokia's patents then I don't see how they could win this one but time will tell.
As long as my iPhone 3G and 3G S keep working I'll be happy :)

I don't think Nokia's act of patent trolling has something to do with actual patent infringements. iPhone's been on the market for 2,5 years, Nokia have made their tear-downs (like those on FixIt) looooong time ago, and they for some reason decided to wait and maybe politely ask Apple to promise not to do this again? Do they really want us to believe in such bullshit? Why haven't they filed a lawsuit until they're in a really shitty market position?

The problem isn't that Apple didn't pay Nokia it's that the company they did license the tech from lost their patent case to Nokia. So now Nokia wants to collect but Apple already paid somebody (InterDigital) for the use of the technology. I could be wrong but that's what it seems like.

The patent system blows. Legally, if Nokia owns these patents and they are upheld, Apple will end up paying. However, Nokia, among many many others, are sucking up patents without building anything. Filing a patent is cheaper than producing the actual product. As long as filing patents is cheap ("cheap" for large corporations) and doesn't require a proof of concept, this practice will continue and innovation will be stifled.

@JohnO:

"However, Nokia, among many many others, are sucking up patents without building anything."

Patent Squatting.

@derloos
it is possible that Nokia has been in contact with apple about this, trying to reach an agreement which apple didn't want to make. Nokia gets sick of waiting and sues.

@derloos:
I tend to agree. I think in this instance Apple is an innocent third party of a drive by suing.
Apple has not invented anything in the GSM area. Nothing. Apple doesn't even make its own chipsets.
Apple simply bought commercially available off the shelf parts from Infineon and Broadcom and put them in a box.
If one of those companies violated Nokia patents then those companies should hold Apple harmless, and pay any royalties on Apple's behalf.
Apple went to the store and bought standard products in commercial chip-sets.
@Andrew:

the company they did license the tech from lost their patent case to Nokia.

[citation needed]
@JohnO:

Nokia, among many many others, are sucking up patents without building anything.

Surely you jest?! Nokia not make anything? Come on, you know better.

Patent trolling, Nokia? Really? Sad. The system is in desperate need of reform. Just because other companies have paid doesn't mean the patents are valid, just means it was cheaper to license than to fight. Theyay be valid for all I know, but I've gotten far more used to these shenanigans being shenanigans.

35 billion in the bank? Ummm, not quite, more like 5.2. Yes thats still quite a lot of $$ however last years ending balnce for cash was just over 11 and now it's half that. They also going to need the $$ to fund operations next year.

"Nokia, among many many others, are sucking up patents without building anything."
- like Apple? - seems there's a story every other week about Apple's latest patent application without it ever being incorporated into a product - just to protect their research.
Besides, are we really suggesting that Nokia bought these patents rather than doing the work themselves? - I don't think so.
Likewise to references to patent trolling or squatting - does anyone actually think Nokia are not making use of these patented technologies themselves? Hellooo...

SBlyth:

Likewise to references to patent trolling or squatting – does anyone actually think Nokia are not making use of these patented technologies themselves?

You seem to have flunked out of Fanboy 101. Let me supply the clif notes:
Patent held by Apple:

Miraculous invention by a divine power, the work of absolute genius, and not to be encroached upon regardless of how obvious, or how much prior art exists.

Patent held by others:

Mere floor sweepings, used only to milk Apple's profits, the work of trolls and patentwhores. All of them are invalid, or the workproduct of stolen apple secrets.

@icebike
Nokia claims to have licensed 40 manufacturers, including "all major" ones, so it is not out of the question to assume Broadcom and Infineon are on that list, especially since they also manufacture for Nokia. However, that list is not public, so it is impossible to say for sure.
Nokia won two large cases, against Qualcomm, and InterDigital, in the past 2 years. I do not know if InterDigital was a supplier/licensor to Apple, but this is likely the case Andrew refers to:
http://online.wsj.com/article/BT-CO-20091019-710028.html
@derloos
Nokia has not been patent squatting, since they have actively been developing products that use this technology. I would also sincerely doubt Nokia has waiting to spring this on Apple; the courts take an exceptionally dim view of a company that licenses patents, but never contacts an alleged infringer. Most likely, the two companies have been in frequent contact about this issue, in some scenario like this:
1) Apple announces/develops GSM based phone
2) Nokia contacts Apple, saying we have patent XXXX, you need to license our technology like these other 40 companies to use this in your product.
3) Apple tells Nokia either "we do not believe your patent is valid/applies" or "take it up with our suppliers.
4-9) Apple and Nokia repeat steps 2 and 3 with degrees of escalation, culminating in a failure to reach a agreement or settlement.
10) Nokia files suit.
Reasonable people can (and should) argue as to the merits of this patent, and of the patent system in general, but Nokia is hardly a NTP-type patent troll, because they actually create and sell products based on the things they claim to develop.

If you wanna talk about patents that never come to fruition, look no further than Apple. Almost every other day they introduce ridiculous patents that never see to the manufacturing floor. I don't understand why Nokia is wrong even if Apple is an "innocent" third-party. People are taking this cultish view of Apple to a whole new level. Newsflash- even Apple is not immune from the law.

@icebike
Where do you see that Apple has 35 billion in the bank? Surely you are not referring to their revenue. The only figure on that link you posted that comes remotely close to 35 bil is revenue and that is not a gauge of how much cash Apple has.

@Bong
Let me change what I sai... I love my iPhone bcuz of apple of course bcuz if it wasn't for apple it wuldnt be a iPhone but I love it waaaaaaaaaayyyyyy more bcuz of jailbreaking and being able to play NES, SNES. GBA etc... without jailbreaking I think the iPhone wuld be a little boring

@Fassy I must apologize here for misusing the term. I've actually meant those who use their patents to press their competitors in court, whether those patents are relevant or not.

@IGenuis You might wanna rephrase your statement and say that Nokia is jealous because that more money than Nokia. Nokia sold 97 million phones in Q1 of 2009 alone. Apple doesn't come close to Nokia in terms of how many phones they sell.

@SBlyth:

Likewise to references to patent trolling or squatting – does anyone actually think Nokia are not making use of these patented technologies themselves? Hellooo

I was merely posting the term that's widely used to describe JohnO's comment. I have no idea whether or not Nokia patent squats, and wasn't claiming so. I don't even follow that sort of stuff.

@Josh and Jason
On September 26, 2009 Apple had $32.625 billion in Current Assets, otherwise known as liquid assets (cash, short term investments, inventory or other items that are easily converted into cash). In accounting and investing terms, Current Assets are the equivalent of cash on hand.

@Josh and Jason
Just one other piece of advice: steer clear of investing in individual stocks until you learn how to read a balance sheet.

i like how the pic in the summary is still in apple favor, nokia patent trolls just as much as apple, they just dont sue everybody and there mother like apple.

I'm going by the link he provided, I just found the balance sheet but the yahoo page didn't reflect current info. But as I and I think Jason were referring to is their Cash and Cash equivalents not their Current assets as a whole.

so how long before apple pays up? or is apple going to install iphone towers next all att gsm towers?

@Fassy:
The link you provided actually was for a case where Nokia was found innocent of violating someone else's patent. I don't think that applies.
Your assessment of the probable scenario seems quite reasonable.
Apple may simply be relying on KSR vs Teleflex, (2007) where the Supreme court found that obvious applications of common concepts are not patentable, and putting wifi and 3G etc. all in a tiny box in your pocket is perfectly obvious and inevitable to anyone skilled in the trade. http://tinyurl.com/6je35n
It seems likely the others settled prior to that decision.

@Josh:
The link I provided listed Total Cash (mrq): 24.22B.
(MRTQ = Most Recent Quarter (mrq): 27-Jun-09
But I also stated that Yahoo Finance runs a few days behind, that the most recent quarter they have is still not up to date.
But as of 27 June they ALREADY had 24.22 Billion in CASH.
With the most recent quarter its gone up to 33 Billion.
These figures are plainly listed on that page, except the 34Billion number, but Google is your friend.http://www.techcrunch.com/2009/10/20/apples-sauce-34-billion-in-cash-sto...

@Josh
Like I said, steer clear of investing in individual stocks until you understand how a balance sheet works or what accountants/investors mean when they talk about "cash".
Also, avoid commenting on things that you do not understand.

@icebike
I dont think that quite applies either, but that case and the Qualcomm case (where they were also found innocent of violating Qualcomm's patents) are the only ones I knew of offhand directly involving Nokia and GSM-related patents. If Andrew has a directly relevant citation, I would like to see it, too.
Not directly relevant to the Apple/Nokia case, but can the KSR case be used to void pre-existing deals? I would think RIM would love to get a few dozen million back from NTP for patenting wireless email...

@mystic and @icebike well from the Apple website or even the SEC website I pulled up the most recent 10-Q (June 27, 09) and their Cash and Cash Equivalents were 5.6 billion. The Total Assets line is 35 billion but not cash.
jay

Mystic, you keep telling Jason to come back when they understand what current assets means. I'm pretty sure your the one that doesn't know. You see on the balance sheet where it says Cash and Cash Equivalents, thats what us accountants call cash, not current assets.

@Mystic
I think you might need to learn what CURRENT ASSETS mean. Current Asset is just what the company COULD POTENTIALLY convert into cash but it's in no way CASH in the bank.
Oh and by the way, I have a BS in Accounting, a MS in ACCOUNTING and a CPA. Enjoy!
Jay

@Jason
I think your supposed BS in Accounting stands for you know what.
@Frank
Like I said, come back when you understand the meaning of Current Assets.

Please somebody explain:
Why do all Apple Fanboys want Apple to have a < 20% profit on each handset compared to others' 5-10%?
Why are they happy for CLEARLY BEING RIPPED OFF?
The iPhone is MADE IN CHINA!
Well that's a sign of Quality isn't it...

Fanboys say: Apple for the win!
But every other reasonable person says: THE Consumers for the win!
A fanboy asked me why buy a Nokia? And I said I don't buy Brands, I buy Products, in this case an N900 (I've never ever had a Nokia handset before)