Apple sued by Nokia claiming patent infrigement
Nokia Oyj, the world’s largest phone maker, sued rival Apple Inc., claiming infringement of 10 patents and seeking back royalties on the 33.7 million iPhones sold since the device’s introduction in 2007.
Nokia said in a complaint filed today in federal court in Wilmington, Delaware, that all Apple iPhone models use Nokia’s technology for wireless data, speech coding, security and encryption. Nokia has made efforts to license the technology to Apple, which has “refused to compensate Nokia,” the Finland- based company said in the lawsuit.
“By refusing to agree” to “appropriate terms for Nokia’s intellectual property, Apple is attempting to get a free ride on the back of Nokia’s innovation,” Ilkka Rahnasto, Nokia’s vice president for legal and intellectual property, said in a statement.
Nokia is seeking royalties for the patents that have been infringed with the Apple iPhone, Apple iPhone 3G and Apple iPhone 3GS.
Apple’s actions have allowed it to charge less for its products, because it hasn’t had to recover development costs, Nokia said in its complaint. Nokia said it spent about 40 billion euros ($60.1 billion) during the past two decades in research and development.
Steve Dowling, a spokesman for Cupertino, California-based Apple, said the company doesn’t comment on pending litigation.
Third-Quarter Sales
Apple sold 7.4 million iPhones in the third quarter. Nokia, with sales in more than 150 countries, delivered 5.7 million touch-screen devices and shipped 108.5 million phones overall in the quarter.
Nokia reported its first net loss last week, while Apple beat analyst estimates for sales and profit because of the iPhone’s success. Apple reported a 25 percent increase in third- quarter revenue, compared with a 20 percent drop at Nokia.
Nokia, which introduced its first mass-market handheld phone in 1987, helped develop the GSM standard for calls and text messaging, which dominates in most countries outside the U.S. With technology going back that far, any newer companies would be forced to pay royalties to Nokia, said Ben Wood, a London-based analyst at CCS Insight.
“This discussion has obviously been going on with Apple since the iPhone was announced and they haven’t reached an agreement so they’ve decided the only alternative is a legal judgment,” Wood said. “This has been looming for a long time.”
Touch-Screen Devices
Nokia has been unable to match sales of the iPhone with its own touch-screen device. Last year it introduced the midprice 5800 XpressMusic smart phone and sold more than 6.8 million units. Since introducing the N97 in June, Nokia has sold 1.8 million units of that higher-priced touch-screen phone with a slide-out keyboard.
Nokia, which didn’t specify in its complaint what royalties it is seeking, could ask the court for as much as 2 percent of iPhone sales, said Gene Munster of Piper Jaffray & Co.
“Ultimately, the resolution is uncertain, but even the most extreme scenario” of $12 a unit, “which we believe is unlikely, would not change our positive thesis on the iPhone and Apple,” Munster wrote.
