Nokia Assails Apple Victory Over VirnetX in U.S. Patent Schism

Smartphone maker Nokia Oyj has become both a friend and a foe to one-time nemesis Apple Inc. when it comes to patents.

Nokia, once the world’s largest smartphone maker, says U.S. courts are going too far in rolling back intellectual property rights. In one case, it supports Apple’s right to block the sale of products that infringe patents. In another, it contends an appeals court was wrong to throw out a $368 million damage award against the iPhone maker.

The company’s recent court filings underscore the split among technology companies over how to curb abusive lawsuits -- some use the pejorative term “patent trolls” to describe litigants -- without undermining rights to inventions that have been linked to more than $763 billion in U.S. sales every year.

“You’re seeing pushback that things are going too far, too fast,” said patent lawyer Paul Berghoff of McDonnell Boehnen Hulbert & Berghoff in Chicago. “The general drumbeat in the press about patents is the patent system is broken, patents are too easy to get.”

Nokia, based in Espoo, Finland, sold its mobile phone business while retaining the patents. The company’s position on patent rights contrasts with some Silicon Valley companies, including Google Inc., maker of the Android operating system that runs most of the mobile phones in the world. Google and networking company Cisco Systems Inc. are among companies that want more done to lessen the number of expensive patent suits.

They have the ear of Republicans in Congress, who have pledged to pass legislation next year when they will control both houses.

2011 Settlement

Nokia said it wasn’t trying to take sides in either of Apple’s underlying disputes. The two companies have their own legal history -- in 2011, Apple and Nokia settled a two-year battle over patent royalties for mobile phones.

“We believe that in some areas the pendulum appears to be swinging too far in one direction,” Mark Durrant, a Nokia spokesman, said in an e-mail.

On Sept. 16, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit ordered a review of how much Apple should pay for infringing VirnetX Holding Corp.’s patents covering networks to allow remote access to computers. In a filing Nov. 6, Nokia urged the court to take the unusual step of having the case heard before all active judges.

Nokia in a filing said the Federal Circuit had come up with an “unworkable” standard on how to determine the value of a single feature in a complex electronic device.

Blocking Samsung

In October, Nokia sided with Apple in a different case, calling for a halt in sales of some Samsung Electronics Co. products a jury said violated Apple patents.

Nokia said in an Oct. 31 filing that the ruling could set a standard leading to compulsory licensing of patented ideas to all competitors.

The rules for patent litigation have been in flux for about a decade, with limits placed on what types of inventions qualify for legal protection, and new ways to challenge patents outside the courts.

Apple is part of a group that supports some limited legislative changes while warning that too much could hurt the U.S. economy. Other members include Microsoft Corp., Pfizer Inc. and General Electric Co.

“The details differ as the decades roll by, but there is no perfect balance point,” said Berghoff. “Somebody’s ‘strong patent rights are spurring innovation’ is someone else’s ‘strong patents are causing litigation.’”

Big Payday

Driving much of the change is a desire to make it less lucrative for companies that buy up patents on the cheap and then file suits in hopes of a big payday. Such companies, called non-practicing entities, are often derided as “trolls” who milk the assets from those who produce products.

The debate isn’t just limited to the computer and electronics industries. The Medical Device Manufacturers Association, a lobbying group with executives from Boston Scientific Corp. and Zoll Medical Corp. on its board, is backing a petition by patent-licensing entity Vringo Inc. asking the Federal Circuit to reinstate a jury verdict it won against Google Inc.

A three-judge panel threw out the verdict in August, and the medical device companies are backing Vringo’s petition for the case to be heard before the entire court.

The decision will “deter the significant investment of time, resources, and money needed to ensure further advances in technology upon which progress depends,” the group said in an Oct. 31 filing with the court.

Google, in its own filing Nov. 3, said Vringo’s complaint isn’t with the law, but with the results that invalidated its patents.

Nokia has not filed a brief in the Vringo case, a sign it doesn’t see an issue that would effect the Finnish company.

“We continue to advocate for fair and balanced laws and court rulings,” Durrant said.

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