Apple Will ‘Vigorously’ Defend Against Nokia iPhone Lawsuit
7:55 am, October 28th, 2009, Ed Sutherland
Photo: bloomsberries/flickr)
Apple will “vigorously” defend itself against a Nokia patent infringement lawsuit, according to financial documents released Tuesday evening. The remarks are the first made by the Cupertino, Calif. company about a lawsuit by Nokia that could be worth up to an estimated $1 billion.
“The complaint alleges that these patents are essential to one or more of the GSM, UMTS and 802.11 wireless communication standards, and that the Company has the right to license these patents from plaintiff on fair, reasonable, and non-descriminatory (”FRAND”) terms and conditions,” Apple said in a 10-K filing with the Securities and Exchange Commission. “Plaintiff seeks unspecified FRAND compensation and other relief. The Company’s response to the complaint is not yet due. The Company intends to defend the case vigorously.”
In a complaint filed last week, Nokia accuses Apple of “attempting to get a free ride” off the Finnish company’s research efforts and not agreeing to licensing terms. Nokia alleges patent infringement covers iPhones since 2007 and includes GSM, 3G and Wi-Fi transmission techniques along with speech coding, encryption and security. Piper Jaffray analyst Gene Munster believes Apple is seeking a 1 percent to 2 percent royalty, or $6 to $12 for each iPhone sold.
Apple’s initial indications of a defense could stretch a one year patent lawsuit into up to three years, a mobile licensing expert told Reuters. “It’s not a David versus Goliath story,” Bill Merritt of InterDigital said. “These are two Goliaths.”
Nokia has seen the iPhone cut into its smartphone lead. Although still the No. 1 smartphone seller, Nokia has watched its lead shrink from 72 percent of smartphones to 50 percent of the handsets. Apple now has 14 percent of the smartphone sales, according to second quarter figures.
In related news, Apple told the SEC it is defending 47 patent infringement lawsuits – 27 filed just in 2009. The nearly 50 lawsuits “consume significant time and expense,” according to the company’s financial statement.
[Via 10-K, AppleInsider and 9to5Mac]
Posted by Ed Sutherland in News | Comment on this article
“…Gene Munster believes Apple is seeking a 1 percent to 2 percent royalty…”
Well then, Gene Munster is an idiot… Why would Apple seek royalties on its OWN phones???…
=)
Omer B, on October 28th, 2009 at 9:00 am
It doesn’t seem that Apple could win this one anyway. They just want to wear Nokia down a bit in legal log jams. Nokia have patents which other manufactuers pay for. If Nokia is right and Apple are using them and not paying then how can Jobs and Co. avoid handing over the cash.
It wouldn’t take long to identify those patents in the Apple technology and see if they are using something without paying for it.
I suspect Nokia has been trying to get Apple’s attention on this for a while and the legal process was pushed forward post last board meeting in Finland. I don’t think it has anything to do with market share as suggested. Nokia could loose market share and still have a reduced but sizable income from the patent royalties.
Mark Rich, on October 28th, 2009 at 10:19 am
“Why would Apple seek royalties on its OWN phones?”
The implication is that Apple intends to, and has intended to, pay royalties on those patents–contrary to all the knee-jerk reactions last week that they “stole” IP. They’ve been negotiating with Nokia for a royalty that they consider reasonable, 1% to 2% according to Munster, but Nokia has likely been holding out for a much higher number. One article guessed as high as 10%.
The reference to FRAND suggests that Apple feels Nokia’s demands have either been discriminatory or unfair or unreasonable, and so they’re both gonna use the courts as part of their negotiating. When any invention is a part of a standard, there are rules that apply to the licensor (Nokia) and not just the licensee (Apple), or else Nokia could arbitrarily charge anything, however egregious, to people using a standard.
Just Saying, on October 28th, 2009 at 10:20 am
Actually Mark, Nokia and Qualcomm are part of a cross license group that it is believed that Apple is paying all proper fees to. in which case it would seem more like Nokia is trying to double dip.
also does anyone really believe that Apple would just ‘oh well’ the issue of these patents and didn’t have their very large legal office sept-check everything before Jobs even muttered the word iphone. and has the paperwork to prove it.
Charli, on October 28th, 2009 at 12:21 pm
Without stating the bleeding obvious, they’re going to have to aren’t they! They’re goning to have to throw everything they have into this fight. This will cost staggering amounts over a very long, long time if they lose this, given the number of units in circulation world-wide.
Fuzzypig, on October 28th, 2009 at 2:39 pm