By Jon Hood
ConsumerAffairs.com
October 23, 2009
Apple's iPhone is once again generating controversy, this time in the form of a patent-infringement suit from technology giant Nokia. Experts say the case's amount in controversy could approach $1 billion.
Nokia's suit claims that the iPhone violates no fewer than 10 Nokia-owned patents, including one for wireless data transmission. Nokia points out that over 40 other companies license and pay for such patents; because Apple never followed suit, the action applies to all iPhones manufactured since the device's inception. Nokia Vice President Ilkka Rahnasto charges that "Apple is attempting to get a free ride on the back of Nokia's innovation."
Nokia says that Apple saved money by failing to license its patents, allowing it to price the iPhone low enough to appeal to the masses. Indeed, Nokia has lost some of its status as cell phone king with the rollout of so-called "smartphones" like the iPhone. Apple has staked out a huge section of this market over the past two years, while Nokia has seen a noticeable decline.
Nokia is still a force to be reckoned with, as it holds a number of invaluable mobile technology patents. As Ben Wood, research director at wireless analyst CCS Insight, told Reuters, "It is almost inconceivable that someone can produce a mobile phone without using Nokia patented technologies."
Curiously, Nokia says the violations have been occurring since the iPhone's 2007 inception, but didn't bring suit until the end of 2009. Some analysts speculate that Nokia was spurred on by Apple's quarterly statement, released earlier this week, showing record sales of iPhones and other Mac products. Nokia may simply want to share in the wealth, or at least assert through litigation that it isn't going anywhere soon.
Nokia hasn't asked for an injunction, so there is little chance that iPhone screens will suddenly go blank without explanation. And while Nokia hasn't yet specified the damages it is seeking, analysts say they could range anywhere from $200 million to $1 billion.
The suit is the latest in a string of notable iPhone-based actions. In August 2008, Apple was hit with a suit claiming that the iPhone 3G was able to connect to AT&T's network only 25 percent of the time. This August, a class action accused Apple of repeatedly failing to activate advanced texting capabilities on the iPhone despite numerous promises to do so. Apple finally went live with multimedia text messaging, or MMS, in late September, albeit with a few glitches.
Nokia has found itself on the other side of patent-infringement claims as well. Last year, the company settled a claim by Qualcomm that Nokia was using 12 of its patented methods without permission. The parties' 2008 settlement agreement, reached on the proverbial courthouse steps, required Nokia to pay royalties to Qualcomm for 15 years in exchange for the right to patent licenses.
While the present case has significant legal implications, it will be watched most closely by tech junkies and the phone industry at large. Whether Nokia is actually vying for a win at trial or simply aiming to put a chip in Apples armor is anybody's guess at this point.
