“Sounds like sour grapes to me”
Apple has filed around 14 lawsuits against Nokia.
And did so in a timely manner.
Personally, I think Nokia didn't sue way back when because nobody thought the iPhone would succeed so much. Now Nokia is scared and resorting to lawsuits.
BTW, the MAD doctrine is also why patent trolls are so dangerous. They undermine the game since they have no products over which the defendant can counter-sue.
October 22nd, 2009
by Daniel Eran Dilger
Nokia has filed suit over patent infringement on Apple’ iPhone, claiming that “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.” Actually the reverse is true.
As the world’s leader in handset sales by a wide margin, Nokia most certainly does have one of the “strongest and broadest patent portfolios in the industry,” as the company says. And having licensed its technology to nearly every mobile maker in the industry, it’s not surprising that Apple will have to pay Nokia to play in the phone market.
However, Nokia is painting a picture that doesn’t doesn’t really mesh with reality, suggesting that Apple is a rogue manufacturer intent on breaking patent laws. In reality, Apple maintains one of the most experienced legal teams in the field of intellectual property, knows how the industry works, and either pays for IP or proves that it doesn’t need to.
Nokia sues Apple over iPhone’s use of patented wireless standards
Apple, tamer of trolls
After all, this is the company that in 2005 outmatched Microsoft in slaying the Burst.com multimedia patent trolls. After Redmond paid out $60 million to Burst, Apple stepped in and invalidated most of the company’s patents and then settled for just a sixth as much, despite the giggles of pundits who hoped Apple would be forced to pay out far more than Microsoft.
Apple also expertly navigated the perilous waters surrounding the iPod, buying out trolls or in some cases partnering with them for mutually beneficial results. That’s what it did when Creative creatively threatened to get an injunction against iPod sales; Apple pulled out its own patents over a Beer Summit and ended up talking Creative into making iPod accessories and liking it.
This is a company that has played both sides of the IP game, contributing its patents to pools and licensing others’ back. An easy example is the MPEG Licensing Authority, which Apple repeatedly had to dicker with to pull licensing down to reasonable levels. In 2002, Apple staunchly refused to ship Quicktime 6 until the MPEG LA agreed to reasonable streaming fees for MEPG-4.
Apple is now gearing up again to battle MPEG LA over H.264 streaming fees set to explode in 2011, while the powerless open source community just curses under its breath, cowers in the shadows, and suggests using Ogg instead.
When the going gets tough, Nokia gets litigious
Analysts say Apple has similarly been working with Nokia to hash out an acceptable patent agreement for at least a year. So why is Nokia grandstanding about its patent suit to the press for sympathy? Because that’s about all Nokia has left going for it.
The company now sits on at least four operating system strategies: its Nokia OS “no frills” Series 30 and “basic” Series 40 embedded systems for simple phones; Symbian OS, its flagship smartphone system that just converted itself from a commercial enterprise in free fall to an open source giveaway bin; various flavors of Linux that power the company’s not-quite-a-phone devices; Windows 7 on its netback experiment; and rumors about following Sony Ericsson into the fetid swamps of Windows Mobile just to cover all the bases.
Nokia is a lot like the Microsoft of mobile phones: on top of the market for reasons nobody can still remember and yet convinced that things won’t ever change despite clear evidence to the contrary, not the least of which is the company’s frequently absurdist management decisions. Such as partnering with each other to be led out of the pit.
Readers Write About Symbian, OS X and the iPhone
iPhone panic spurs Nokia to dump Symbian on high end
Follow the lack of money
A look at Nokia’s finances is also revealing. While the company sold 108,500,000 phones in the last quarter (an 8% drop from the previous year), a figure that dwarfs Apple’s sales of 7,367,000 iPhones over the same period, Nokia’s average selling price was around $90 compared to Apple’s $612. Nokia sells a lot of crap; Apple only sells the iPhone.
That’s why despite selling a tiny fraction of the volume that Nokia pushed into the channel, Apple’s iPhone brought in revenues of $4.5 billion compared to Nokia Devices and Services’ $9.8 billion, and actually earned gross margins of $2.7 billion compared to Nokia’s $3 billion, and Apple’s EBIT (earnings before interest and taxes; operating profit) was $2 billion to Nokia’s $1 billion.
Apple is just now entering its third year as a smartphone vendor and it has already beaten Nokia at its own game. And while Apple’s business is growing dramatically, Nokia’s sales slipped behind in every market it did business in: down 1.1% in Europe, down 6.6% in China, down 8.8% in the Middle East and Africa, down 11.8% in Latin America, and in Apple’s home territory of North America, Nokia was down 31.1%.
Nokia is trying to demand something like $12 per iPhone in royalties, which analysts describe as ridiculous posturing. But that goal indicates that Nokia sees no future in its own ability to innovate, and that it would rather latch onto Apple like a barnacle and live the easy life of a parasite, earning more from each sale of Apple’s iPhone than it makes from selling its own devices.
That’s why claiming that “Apple is attempting to get a free ride on the back of Nokia’s innovation” is about as shamelessly bottom feeding as Nokia could be expected to get.
December 11th, 2009
Daniel Eran Dilger
Nokia sued Apple, now Apple is suing Nokia; both companies claim the other is trying to appropriate their own technology unfairly. But that’s not really the case at all. The real story isn’t even being reported.
Apple’s own press release only says that the company is countersuing Nokia over “stealing” 13 of Apple’s patents; Nokia originally claimed Apple had similarly infringed on 10 of its patents rather than doing its own innovative research. Digging deeper into Apple’s legal filings however, it becomes clear that all patents are not equal.
Pooling patents
It’s not a just case of Apple’s patents being better or more novel. Nokia says its patents are related to GSM and UMTS standards as well as 802.11 WiFi technologies. The problem for Nokia is that the company has already committed itself to license its standards-related patents using “fair, reasonable and non-discriminatory terms.”
When companies pool their patents into open standards as Nokia did, it can benefit the entire industry. It also benefits the contributing companies, who earn royalties on those patents as the portfolio of technology related to a given standard is licensed by other companies.
Without patent pooling within international standards bodies, each company would have to develop its own complete set of technologies without any of the benefits of sharing. There would also be less interoperability between products.
Pooling patents together from multiple companies also allows third-party companies to adapt and deploy technologies originally created by others. This creates competition through cooperation and benefits consumers. Companies like Nokia with expertise in wireless mobile technologies, and companies like Apple with expertise in multimedia and network computing, can combine their talents to create interoperable standards which third parties can license as a package.
Licensed broadly vs private innovation
Nokia, Apple, and many other companies have all contributed to pooled standards such as MPEG video, WiFi wireless networking, web standards, and mobile standards such as GSM and UMTS. Once they pool their technologies into a standard, their intellectual property is now understood to be available at fair and reasonable licensing terms to any company that wishes to use it and pay the established licensing fees, or in some cases, completely free and open.
After Nokia committed its ten patents to various mobile and WiFi standards, it attempted to discriminate its licensing terms against Apple. Due to the success of the iPhone, Nokia wanted more money from Apple then it gets from other licensees, and also wanted open access to Apple’s private portfolio of technology used in the iPhone.
While Apple has contributed a variety of its patented technologies to open standards which are licensed under “fair, reasonable and non-discriminatory terms,” it also has a variety of technologies that are not related to any open standards. These differentiate the iPod and iPhone, and are sold directly to consumers rather than being broadly licensed to other technology companies to use.
Patent discrimination
Nokia hoped to leverage its pooled patents to gain access to Apple’s private patents, patents Nokia had already began using in its own phones, a grossly hypocritical move after alleging that Apple had stolen its technologies because it wasn’t innovative enough to develop its own.
So this is not a case of tit-for-tat as virtually every report so far has suggested. It’s a case of Nokia, finding itself well behind the curve in mobile phones, attempting to extort unfair, unreasonable, and discriminatory licensing terms against Apple for patents which Nokia has already committed to license under fair reasonable and nondiscriminatory terms.
Why Nokia is suing Apple over iPhone GSM/UMTS patents
Another interesting take away here is that Nokia isn’t the only company stealing Apple’s technology. Pundits cheered when when Palm did it, and they’re giddy at the prospect of Android stealing more and more of Apple’s intellectual property.
And while the industry rags all complained that Apple was going to stifle competition in the industry by going after Palm, Apple didn’t. And earlier, when it was claimed that Apple had a “killer patent” it would use to destroy every competitor to the iPod… that didn’t happen either. and when pundits fretted that Apple would use its multitouch patents to kill innovation and smart phones… that didn’t happen either.
Why Apple’s Tim Cook Did Not Threaten Palm Pre
Apple’s Billion Dollar Patent Bluster
The iPhone Multitouch Patent Myth
Instead, Apple only responded to Nokia after that company launched a highly publicized assault on the iPhone, one which was celebrated and cheered on by Nokia’s fanboys and much of the technology press in general. Clearly, Apple prefers to win in the marketplace and is only using its patents defensively. So pundits, chew on that before scribbling up your next missive about how Apple may destroy the world via its patent holdings.