Friday, October 30, 2009

Mobile phone and computer manufacturer Nokia is filing a lawsuit against Apple over patent infringements. The infringements include speech coding, wireless data, security and encryption technology Nokia claims is used in Apple iPhones.

According to a Nokia press release, 40 other companies are paying royalties to them in return for the use of their patented technology. Therefore, Nokia wants Apple to also pay for its usage.

“The basic principle in the mobile industry is that those companies who contribute in technology development to establish standards create intellectual property, which others then need to compensate for,” Ilkka Rahnasto, Nokia’s Vice President of Legal & Intellectual Property, said in the press release. “Apple is also expected to follow this principle. 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.”

One industry analyst told PC World that that he believes Nokia is seeking 1–2% royalties per device. Based on the number of iPhones sold since its 2007 release date, that figure would amount to approximately 400 million USD.

Ben Wood, research director at CCS Insight, said, “It is almost inconceivable that someone can produce a mobile phone without using Nokia patented technologies,” showing how widespread Nokia’s mobile technology is.

In Apple’s SEC 10-K, Apple responded to Nokia claims. “The complaint alleges that these patents are essential to one or more of the GSM, UMTS and 802.11 wireless communications standards, and that the Company [Apple] has the right to license these patents from plaintiff [Nokia] on fair, reasonable, and non-discriminatory terms and conditions. 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,” said Apple.

The Nokia v. Apple lawsuit is set to take place in a Delaware District Court.