The lawsuit, the fifth patent complaint between the two companies in the past year over smartphone technology, broadens the fight to include Apple’s iPad touch-screen computer tablet. Nokia’s filing May 7 in federal court in Madison, Wisconsin, helped push Apple shares down as much as 8.5 percent in New York trading, their steepest drop since October 2008.
In the three years since the iPhone was introduced, Apple has seized Nokia’s position as the company that defines the high-end smartphone market. Nokia, which took mobile phones to the Internet more than 10 years ago with its keyboard-based Communicator, was slow to move to the touch screens featured on the bestselling iPhone and on the iPad, introduced this year.
“Nokia has been the leading developer of many key technologies in mobile devices,” said Paul Melin, general manager of patent licensing at Nokia. “We have taken this step to protect the results of our pioneering development and to put an end to continued unlawful use of Nokia’s innovation.”
The legal battle began in October, when Espoo, Finland- based Nokia filed a lawsuit accusing Apple of infringing 10 patents. It demanded royalties on the more than 51 million iPhones sold since Apple Chief Executive Officer Steve Jobs, 55, introduced the device in 2007.
The five patents in the newest complaint relate to enhanced speech and data transmission, and antenna configurations that improve performance and save space, Nokia said in a statement. The patents aren’t the same ones at issue in cases in a federal court in Delaware, and before the U.S. International Trade Commission, according to Laurie Armstrong, a Nokia spokeswoman.
“This suit shows Nokia is serious,” said Tero Kuittinen, an analyst at Greenwich, Connecticut-based MKM Partners who advises investors to sell Nokia shares. “Even in the last suit, they brought out everything but the kitchen sink, covering user interface, power consumption, speaker, camera. This is one of the broadest clusters of patent litigation in the sector over the past 10 years.”
Nokia is believed to be planning a range of “jumbo smartphones and tablets,” which could compete with the iPad, he said.
The complaint in the new case seeks an unspecified amount of cash compensation and an order that would halt Apple’s use of Nokia inventions.
Steve Dowling, a spokesman for Cupertino, California-based Apple, would only refer to the company’s court filings in Delaware when asked for comment May 7.
In a December filing, the company described Nokia as being “focused on traditional mobile wireless handsets with conventional user interfaces,” while Apple, is “long a leader in computer technology” that “foresaw the importance of converged user-friendly mobile devices.”
Apple has risen about 83 percent in the past year, while Nokia’s ADRs have dropped 26 percent.
Nokia, which last month posted lower-than-estimated profit on competition from the iPhone, is still working on a touch- optimized version of the Symbian operating system that is supposed to make its phones as easy to use as Apple’s.
In court filings in December and February, Apple claimed Nokia was trying to strong-arm Apple into surrendering access to proprietary technology that differentiates the iPhone from other smartphones. Apple said it doesn’t want to license its iPhone- related patents to competitors.
Apple also accused Nokia of purposefully withholding information on patent holdings while helping to establish an industry standard and then demanding unreasonable royalties on those standards for Wi-Fi and wireless transmissions, among other technologies. The allegations are part of a dispute in federal court in Wilmington, Delaware, with the earliest trial scheduled for 2012.
Each company has filed complaints with the U.S. International Trade Commission in Washington in cases that could result in a ban on imports of the other company’s phones. Apple’s ITC complaint against Nokia is scheduled to be heard beginning in October, while proceedings on Nokia’s complaint are scheduled for January, according to the agency’s website.
Mark Durrant, a Nokia spokesman, said the company expects the lawsuit filed May 7 in Wisconsin to be resolved in 12 to 18 months.
The Madison court is known for holding patent trials more quickly than many other courts. It takes, on average, about 12 months for a patent case to go trial in Madison, compared with a nationwide average of 26.6 months, said Greg Upchurch, director of research for St. Louis-based LegalMetric Inc., which compiles litigation data for law firms and companies.
The patents in the Delaware case are considered essential to follow industry standards, so Nokia is required to license them on fair terms as it does to more than 40 companies, Durrant said in an interview. The patents in the Wisconsin case aren’t essential to any standard, so Nokia can refuse to license them and just ask a judge to block use by Apple, he said.
The case is Nokia Corp. v. Apple Inc., 10cv249, U.S. District Court for the Western District of Wisconsin (Madison).
Ford Fusion Hybrid Targeted in Paice Patent Lawsuit
Ford Motor Co.’s Fusion hybrid sedan is using patented technology for its gasoline-electric engines without permission, according to a lawsuit by a Florida company that won a similar claim against Toyota Motor Corp.
Paice LLC sued Ford May 7, seeking unspecified cash compensation. It stopped short of asking the court to halt sales of the Fusion hybrid, a version of Ford’s best-selling car. Marcey Evans, a spokeswoman for Dearborn, Michigan-based Ford, said May 7 the automaker hadn’t reviewed the complaint.
Toyota was ordered to pay $4.23 million to closely held Paice in 2005 for infringing patents for engines in hybrid Prius, Highlander and Lexus vehicles. The amount was based on a royalty for each car sold.
Ford said May 3 it sold 2,726 of its four hybrid models in April, which include versions of the Ford Escape, Mercury Milan, Mercury Mariner and the Fusion.
Paice’s patent 5,343,970 covers a method of supplying torque, or force, to a car’s wheels from both an electric motor and an internal combustion engine. Ford sued Paice in 2005, seeking to invalidate this patent and others after licensing talks broke down. The case was later dismissed because the judge said Ford had no fear of infringement claims at that time.
The new lawsuit filed by Paice in U.S. District Court in Texarkana, Texas, would be before the same judge, David Folsom, who presided over the Toyota case.
Toyota, the world’s largest automaker, lost a verdict that was upheld in 2007 by an appeals court. Paice has since filed another suit in Marshall, demanding royalties on newer models of Toyota vehicles and has a pending case before the U.S. International Trade Commission in Washington.
If it loses the ITC case, scheduled for a hearing in July, the Toyota City, Japan-based company could face a halt of imports of its newest hybrid vehicles.
Paice is represented by Samuel F. Baxter of McKool Smith PC, and Ruffin B. Cordell, Linda Liu Kordziel, Ahmed J. Davis, Jonathan R. Putman, John S. Goetz and Robert E. Hillman of Boston’s Fish & Richardson PC.
The Ford case is Paice v. Ford Motor Co., 10cv92, U.S. District Court for the Eastern District of Texas (Texarkana).
Coca-Cola Sues Florida Soft-Drink Company for Infringing Marks.
The Coca-Cola Co., the world’s largest soft-drink maker, sued a Florida company for trademark infringement.
County Soda Systems Inc. of Pompano Beach, Florida, is accused of selling soft-drink syrup and fountain-dispensing equipment to costumers to enable them to pass off counterfeit products and Coca-Cola’s sodas.
Coca-Cola objected to the labels on County Soda’s dispensing machines, which use the same distinctive Spenserian script employed on the Coca-Cola labels, and also to the Florida company’s use of the word “classic.” The Atlanta-based soft-drink company registered the phrase “Coca-Cola Classic” in 1994, according to the database of the U.S. Patent and Trademark Office.
Included in the complaint, filed May 6 in federal court in Fort Lauderdale, Florida, is an article from the Miami New Times newspaper in which the proprietor of County Soda acknowledged making an “offbrand knockoff” and claimed it “tastes just like what you’re looking for but costs the business owner significantly less.”
Coca-Cola sent County Soda a cease-and-desist letter April 1, 2009, and received a response from counsel for the Florida company April 8. Frank Herrara of Rothstein, Rosenfeldt Adler said his client County Soda “has limited knowledge of the intricacies of intellectual property.”
The letter, which is included in the court filing, promised that new labels would be created for the client’s products, and that County Soda would make no further use of the Spenserian script or refer to their products as “Classic.”
Despite these assurances, County Soda is still infringing, according to court papers. The company is accused of continuing to provide fountain dispensing equipment bearing Coca-Cola’s trademarks to be used with the County Soda syrups “so as to cause consumers to believe that the County Soda’s products” were actually Coca-Cola’s.
The Georgia soft-drink company asked the court to order County Soda to halt its infringement, and for an award of all the company’s profits derived from its alleged infringement. The company also asked for attorney fees, litigation costs and money damages, requesting that the damages be tripled.
The case is The Coca-Cola Co. v. County Soda Systems Inc., 0:10-cv-60725-WJZ, U.S. District Court, Southern District of Florida (Fort Lauderdale)
Trade Secrets/Industrial Espionage
Arthrex Trade Secret Suit Unjustified, Parcus Tells Court
Parcus Medical LLC, a maker of medical devices, denied allegations it’s using trade secrets misappropriated from competitor Arthrex Inc. of Naples, Florida.
The Florida company sued Parcus in federal court in Fort Myers, Florida, in March, claiming some of its former employees violated non-compete agreements and brought proprietary information to Parcus.
One of the accused former employees is Mark Brunsvold, founder of Parcus, which is based in Sturgeon Bay, Wisconsin.
According to court papers, Brunsvold previously was president of Machine Metals, an Arthrex supplier, which was acquired by Arthrex in February 2002. After the acquisition Brunsvold worked for Arthrex until May 2003.
In the Parcus response, the Wisconsin company rejects allegations of misappropriation, and says Arthrex failed to identify any trade secrets that were allegedly misappropriated. Instead, Parcus says, the case is a bad-faith attempt to use the threat of expensive litigation “for the improper purpose of suppressing lawful, fair competition.”
The company noted that Arthrex didn’t file suit until seven years after Brunsvold left, and said that “in an industry where technological innovation is critical to commercial success, whatever distant memories Brunsvold might have retained from seven years ago would certainly be stale, outdated, not highly confidential, not proprietary and commercially and technologically valueless today.”
Parcus also noted that the non-compete agreement Brunsvold signed expired in June 2004.
The case is Anthrex Inc., v. Parcus Medical LLC, 2:10-cv- 00151-CEH-DNG, U.S. District Court, Middle District of Florida (Ft. Myers).
Firelight Media Sued Over Use of ‘Wounded Knee’ Photographs
Firelight Media Inc., a New York-based independent film producer, was sued for copyright infringement by a photographer who shot images of the 1973 siege of the American Indian Movement at Wounded Knee, South Dakota.
Anne Pearse-Hocker is a photojournalist who was present in the village of Wounded Knee during the siege and shot several hundred still photos during that time. In 1996, she was asked to donate her photos from Wounded Knee to the Smithsonian Institution’s National Museum of the American Indian.
When she donated the photos, she specifically retained the copyright, she said in the complaint she filed May 5 in federal court in Alexandria, Virginia. She said the language regarding conditions with respect to the copyright in her deed of gift was drafted by the Smithsonian’s Office of General Counsel.
Firelight asked the Smithsonian for permission to use some of her photos for a five-part miniseries that ran on public broadcast stations beginning in May 2009. The credit line accompanying the photos didn’t mention the photographer’s name, and her permission wasn’t obtained for their use, she said in her court papers.
The film, which was shown at the Sundance Film Festival in Utah in 2009, has since been sold to the general public through the Public Broadcasting System website and by retailers including Amazon.com Inc.
She said as a result, “thousands of copies of her photographs have been sold for commercial gain and profit through sales of the film.”
The photographer said a Smithsonian official has acknowledged that her images were used without her permission.
She is suing the Smithsonian in a separate action in the U.S. Court of Federal Claims.
In her case against Firelight, she asked the court to order Firelight to quit distributing her photos without permission, and for the return of all of her photos that may be in the production company’s possession.
Additionally, she asked for money damages, litigation costs and attorney fees.
The case is Pearse-Hocker v. Firelight Media Inc., 1:10-cv- 00458-CMH,TRJ, U.S. District Court, Eastern District of Virginia (Alexandria).