Why Nokia is Suing Apple Over the iPhone


Engadget's resident legal gadget eagle, Nilay Patel, has put together a great, depth analysis of Nokia's recent lawsuit against Apple and the iPhone over patent infringement.

As usual, the race to hype this dispute as a bitter standoff between two tech giants desperate to destroy one another has all but ignored the reality of how patents -- especially wireless patents -- are licensed, what Nokia's actually asking for, and how it might go about getting it. And as you know, we just don't do things that way, so we've asked our old friend Mathew Gavronski, a patent attorney in the Chicago office of Michael Best & Friedrich, to help us sort things out and figure out what's really going on here -- read on for more.

In a nutshell, Nokia believes Apple is infringing on 10 patents that are core to GSM/UTMS/Wi-Fi. All the other major players have paid up. Apple hasn't. Apple may believe the patent fees are already paid by the manufacturer of the components they bought for the iPhone, or they may just be using the legal system as way to negotiate a lower ultimate licensing fee from Nokia.

If the area interests you, check out the whole analysis and then let us know what you think!

Have something to say about this story? Leave a comment! Need help with something else? Ask in our forums!

Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

Why Nokia is Suing Apple Over the iPhone


I wonder what the wireless industry, in the sense of innovation would look like if everyone stopped all the posturing and actually started working together. I understand that seperate and competing companies are a good thing. I would at least like to see them gather together on the core technologies, almost like CableLabs.

Does every computer maker pay royalties to Nokia over Wi-Fi? And does ATT pay royalties to Nokia over GSM, since ATT is a GSM network?

Nokia: Nobody is buying our shit anymore, so let's go after money from stuff we made ten years ago when we were still innovating.
I don't know which is a more poorly managed company, Nokia or Microsoft.

@ brian
haha right? I'm pretty sure that if palm can get away with literally hacking apples software, apples not going to have to pay a dime to nokia

You clearly didn't read the article or understand how patents work...
The point at hand has nothing to do with handset sales, Nokia so called "drop" (which still doesn't make iPhone a threat to them", or their supposed jealousy.
They have right to patents. If EVERY other company is paying, why is Apple exempt? That's pure silliness. For the past 3 yrs they have most likely been trading emails and calls, getting this stuff worked out (if you know anything about litigation, you know that these things go thru certain stages before the "lets sue em" bit flies).
The thing that is being said is that Apple doesn't have to pay because the company they purchased from paid the royalties. In that case...Apple is exempt, because there is no double payment. But that hasn't been proven. So therefore...Nokia has to get their due monetary value for the innovation they put out there.
Don't act like you're not being biased. Because if someone trampled on any of Apple's patents, you'd be the first saying they are in the right.
This is business. Apple should know first hand how the patent system works, hell...they register a new patent every 5 minutes.

Pretty sure, eh? Find any patent Palm is infringing regarding iTunes sync or STFU

There are another dozen companies out there that are trampling all over Apple's multi-touch patents that they acquired from Fingerworks.
And the litigation issue does have to do with Nokia's sales. They do a cost analysis to see I'd it's worth the man hours to get the settlement. If they were making money in sales, this issue would be placed on the back burner. Instead, Nokia is doing all they can to keep their balance sheets afloat through litigation.
I'm not saying they're in the wrong for protecting their IP. I'm just saying they have nothing better to do. Their anemic smartphone offerings prove that.

dev: palm pre is identifying itself via USB as product named "Apple iPod", how can that be OK?

@Bosco Nokia has multitouch patents before Apple had them. Please, Nokia has been developing and making cell phones for more than 20 years, do you think that then don't have a lot more patents than Apple for phones?
And do you are saying that if a company doesn't have a drop in sales doesn't hav to sue other companies for allegedly patent infrigement?

Misrepresentation only applies in advertising and in public view. This is unseen, machine-to-machine communication. Find the law that applies.
Palm might do that, except, as stated many times here on this very blog, Apple does not license and will not sell. So...find the law that says Palm's actions are illegal.

1) Forbidden? No. Recommended against, except in certain circumstances, yes. You are free to peruse the latest specification, if you wish. http://tinyurl.com/6fuo3t .
2) Even if the USB spec forbade it, the USB IF is a voluntary trade group, not a government, and not imbued with the force of law.
Again, for those who keep implying in tIPB comments that Palm is doing anything illegal here, find the law.


"I wonder what the wireless industry, in the sense of innovation would look like if everyone stopped all the posturing and actually started working together."

They already did this.

Wireless standards like GSM are developed by a standards-setting body with the cooperation of its members -- in the case of GSM and UMTS, it's the European Telecommunications Standards Institute (ETSI), and with WiFi it's the familiar IEEE.

All the members AGREE to license their patents to others on "fair, reasonable, and non-discriminatory" terms.
Prices are not high. Nobody is denied. Everybody cooperates and there is a clearing house for the royalties.
Motorola pays Nokia for use of Nokia patents. Nokia pays Motorola for use of Moto patents. Some sign cross licensing (barter) agreements when each has something the other wants.
Its all a nice big happy working group.
The along comes Apple. No patents the Cellular space to cross license, so they would be expected to PAY.
But Apple just stiffs the group and refuses to pay.
So you can only have Working Together when people actually DO work together.

@Dev #16.
Well said.
If Apple had a legal case, they would already be in court. If a hundred Apple lawyers can't find a legal leg to stand on, nobody posting in this blog will either.
Palm violated a gentleman's agreement and nothing more.

I know it does not have any legal bindings and that’s not what I have a problem with. Palm's continued cat and mouse games with this issue is getting old and yes, it does not have any legal implications, but it sure does have a moral one.
If not for the sake of professionalism as a corporation, maybe for the sake of their customers. If they grow up and connect to iTunes like any other vendor, maybe their customers do not have to worry about waking up one day to see sync broken once again.
It's not like there is no alternative, there is one and its being used by all kind of vendors for years now. Time for Palm to grow up and provide a consistent solution to their customers for once.

You seem to have confused me with somebody who has argued Palm has acted ethically. I have not.
Although, on the subject of cat and mouse games, it takes two to play, and Apple is similarly not above reproach if they issue point releases purely and intentionally to break sync and inconvenience a subset of their iTunes users.

@ Rob you are exactly right. Palm is going to have to pay anything. But odds arepalm and Apple will keep going back and forth where one makes a new update to enable it and then the other updates to stop it.

This is about Nokia and Apple not Palm. Besides these companies have so much money it's rediculous and it's mostly about who has the power to control things and it seams like Nokia wants it right now.

"The along comes Apple. No patents the Cellular space to cross license, so they would be expected to PAY.
But Apple just stiffs the group and refuses to pay."
I think this view is too simple. Like GSM for instance - of which Qualcomm, Interdigital, Nokia and Ericsson are the major ip owners. Of the four, only Nokia is suing, so I assume Apple came to some kind of agreement with the others. No, I think Nokia wants more than money from Apple.

...or, an even simpler explanation would be, since each member controls patents over related but separate technologies, would be that Apple is not using technologies patented by Qualcomm, Interdigital, or Ericsson

Hahaha nice try - but no, GSM will not work without using
the interrelated technologies owned by the companies.

Bzzz...wrong! Not every GSM product uses the entire basket of GSM technologies, or even every patented GSM-related technology. For just one example, I doubt Apple uses the GSM-patented video codecs, since their own are superior for Apple's purposes. For another, Apple likely does not touch any of the patents regarding base station construction or implementation, since they are not a carrier.
Make whatever assumptions you want, but it helps to read at least a little beforehand.

I doubt nokia would go to all this expense and man hours if they had no standing. If apple (gods that they are!-sarcasm) have infringed then they should be held to account. Just like psystar (before you say I know it's a eula infringement and not a patent) should have to pay for what their doing, even if only the die hard would begrudge open use if software.

@bosco i second that royalties in the electronic world doesn't mean shit why bow to Nikia when you're the top selling and most talked about phone in the us

It would appear that Apple has licensing agreements with
Qualcomm, Interdigital and Ericsson. Why not Nokia?

It would appear you believe simply repeating something without addressing refutations somehow makes it true. Logic fail.