Nokia Sues Apple Over Technology Used in IPhone, IPad

The Nokia headquarters sit in Espoo, Finland
The Nokia headquarters sit in Espoo, Finland, last year. Photographer: Henrik Kettunen/Bloomberg

Nokia Oyj, the world’s biggest maker of mobile phones, filed a patent-infringement lawsuit against Apple Inc. in its latest salvo over the iPhone and iPad.

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 today in federal court in Madison, Wisconsin, helped push Apple shares down 4.2 percent in New York trading, their steepest drop since Jan. 22.

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.

‘Nokia is Serious’

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.

Patent Battles

The complaint today 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 today.

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.”

“Patent battles will grow in the mobile industry as we continue to see players coming from the PC and Internet worlds,” said Carolina Milanesi, an analyst with research firm Gartner Inc. Hewlett-Packard Co. cited Palm Inc.’s 1,500 patents as key assets when it announced plans to acquire the mobile-device company last month, she noted.

Apple fell $10.39 to $235.86 in Nasdaq Stock Market trading. Nokia’s American depositary receipts, each representing one ordinary share, fell 4 cents to $10.75 in New York Stock Exchange composite trading.

Apple has risen about 83 percent in the past year, while Nokia’s ADRs have dropped 26 percent.

Symbian System

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.

“Apple’s wireless communication devices take advantage of the decades of continued investments by Nokia to advance cellular communications and to distinguish Nokia’s handsets from those offered by its competitors,” Nokia said in the complaint.

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.

ITC Cases

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. ITC Judge E. James Gildea yesterday ordered proceedings in Nokia’s complaint against Apple to begin Nov. 29.

Mark Durrant, a Nokia spokesman, said the company expects the lawsuit filed today in Wisconsin to be resolved in 12 to 18 months.

Madison Court

The Madison court is known for holding patent trials more quickly than in 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).

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