As most of you will know, Nokia slapped Apple with a patent lawsuit last week. Nokia claims that Apple’s iPhone infringes upon 10 patents related to GSM, UMTS, and WiFi connectivity. In its SEC 10-K annual report filing, Apple made its first cautious response to Nokia’s claims.
Nokia claims that it has patent deals with about 40 other companies in the business for these exact same set of patents, which should add some weight to the Finnish phone maker’s claim. Nokia also states that it has made various offers to Apple about these patents, but that the Cupertino company rejected them all.
Still, with Nokia bleeding marketshare in the smartphone business to Apple’s iPhone, it does come across a little bit as “If you can’t beat them, sue them”.
In its SEC 10-K annual report filing, Apple has responded to Nokia’s claims. Even though the response to the claim is not yet due, Apple does state it does not intend to let this one go by.
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.
Well, this could turn out to be another long legal battle. Now, as you can see in the filing, a company of Apple’s size is involved in a lot of lawsuits – but a big one like this, between two heavyweights? Better get out the popcorn.
“We’ll defend the case vigorously” What does that mean?
Has anyone ever said ” We’ll defend limply?”
Does it mean our lawyers are taking Viagra? Quite a few years ago, a tech company screwed me and 30 other employees out of wages during a court-ordered interim receivership.
We tried to collect our wages through legal action; they responded that they were court-protected and that any action against them would be vigorously defended – with the money they weren’t paying us.
May those thieving accountants and their lying lawyers burn in hell and be sodomised for all eternity – vigorously.
Well, it does not mean cautious as in
“Apple made its first cautious response to Nokia’s claims.”
“May those thieving accountants and their lying lawyers burn in hell and be sodomised for all eternity – vigorously.”
Hilarious!!
My sentiments exactly. May this happen to all patent trolls!
But in this case, I don’t consider Nokia a patent troll. Their entire product line uses these patents, and they’ve already licensed these patents to several other companies, and they’ve spent billions developing the technology.
This is a rare case where, with what limited knowledge of the case I currently possess, I side with the company doing the suing, not the company being sued.
Apple appears to think it does not have to respect other people’s intellectual property, while demanding that other respect theirs.
As for Nokia losing market share – yes that has happened. However, they still sell more smart phones, and more phones overall, than all their other competitors (including Apple) combined, according to Gartner. In fact, Nokia sells about 3 times as many smart phones as Apple does.
It’s just that Nokia doesn’t have the same marketing glitz Apple does, nor the same cult following Apple does. So everyone assumes Apple is kicking Nokia’s butt in the market place, which of course is false (albeit they have taken some share away).
And I have no strong feelings about Nokia one way or the other. I have a basic Nokia flip phone. It’s okay, but nothing special.
And I have an iPod. It’s a good device, but it depends on iTunes, which I hate (both the store and the software).
I also hate Apple’s arrogance. It will be good for them to served some humble pie.
I agree with you. That’s the crux of the problem and, in the end, Apple will quietly license the patented technology from Nokia, and the issue will disappear with a whimper. Meanwhile, Apple will put on a confident public face through their lawyers, blathering about “vigorously defending themselves, blah, blah, blah…” Apple won’t take the chance of bringing this case to court, because it would probably mean giving away a percentage of each iPhone sale to Nokia and the other IP owners.
but that’s exactly what seems to be the normal terms of licensing. they’ll have to pay 3% to nokia, 2% to qualcomm, 1% to ericcson etc..
“If you can’t beat them, sue them”
Note that this is about actual technology patents and not about “Using fingers to touch things” patents Apple generates.
Verenkeitin said, “Note that this is about actual technology patents and not about “Using fingers to touch things” patents Apple generates.”
I know it’s popular to imply that Apple patented multitouch which is something they can’t and also shouldn’t be allowed to do as they didn’t create it. Thankfully for this argument, that’s simply not the case anyways.
Apple patented specific hand gestures to use multitouch… something very reasonable in my opinion as it relates to very specific ways of interacting with a device. To steal it is akin to Microsoft stealing Apple’s user interface concepts in ’83-’84 most of which Apple either invented themselves or purchased from Xerox.
Please don’t continue to muddy the understanding of this issue by reinforcing the former way of thinking.
On that note, the “actual technology” you refer to are technologies that should never have been patentable in the first place as they are what we might like to consider open technologies…. hence the reason why Apple is fighting it and if anything a clear reason why we should be siding with Apple on this issue despite your feelings about unrelated lawsuits they were involved in.
[Again] I know it’s popular (if only almost exclusively on this site) to find a reason to stand against Apple whenever possible, but I would just ask that you reserve that way of thinking for issues for which the outcome might have some impact on your lives rather than it be a way to simply thumb your nose at the company you try so hard to find a reason to hate.
Edited 2009-10-29 07:31 UTC
I like to agree with you but I’m afraid that the following…
…taken from [link]http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p… this patent[/link] does not bode well of your assertion.
Frankly, I’m all in favour of hardware patents but in this case I’ll reserve judgement until I have the full story. If Nokia are talking about purely interoperability patents then I’ll be siding with Apple, loathed as I am to do any such thing.
Apple was shouting about how they patented the crap out of the iPhone. I guess what goes around comes around.
Edit: Bloody OSNews none standard link! ;-p
Edited 2009-10-29 08:50 UTC
“Apple was shouting about how they patented the crap out of the iPhone. I guess what goes around comes around. ”
Exactly …
I see what you’re saying, but if Nokia’s patents are considered “open technology” then why can’t any of the following Apple technologies also be classed as open tech?:
* Multi-touch gesgures when most gesgures are a pretty generic action?
* Or Apples WIMP when using icons as an application identifier is a pretty logical and a standard way of thinking?
(eg companies have “icons” (aka logos) to represent their company, buttons on old devices has “icons” (aka cymbols) to represent their functions, etc)
From where I’m sat, Apple have been very “trigger happy” with their lawyers.
Now whether you agree with Apples individual cases or not, you can’t argue that it’s OK for Apple to defend Apple’s patents but wrong for Nokia to defend their own ones too.
They are cautiously saying that they will vigorously defend the case?
Think of a cat stalking its prey. Cautious approach, vigorous attack.
Umm… is the cat a synonym for a sexual predator? A comment above about eternal sodomy keeps ringing in my head.
i read some articles about the patents and licensing in the mobil communication market and i got the impression that the situation is f–ked up.
there is no unified patent pool for gsm, you’ll have to bargain with the owners of all 4500+ patents covering the standard. and the licenses of the chipmakers (marvel, broadcom, infineon etc.) don’t cover their customers. the reason seems to be this: they collect patent fees of a few percent of the price of the final product and not of the chips used for wireless communication. they don’t do this in the laptop market, you only pay for the chipset you use. maybe apple only wants to pay patent fees for the iphone as computer with wireless capabilities and to as a phone.
Nokia vs Apple: The hidden scandal
http://news.zdnet.co.uk/hardware/0,1000000091,39838928,00.htm
QualComm: The Nokia War
http://www.sramanamitra.com/2007/10/12/qualcomm-the-nokia-war/
3G iPhone and Qualcomm
http://www.sramanamitra.com/2008/05/04/3g-iphone-and-qualcomm/
No doubt, Apple earnings were a home run. They have beaten its largest competitors in the market. The skyrocketing in Apple earnings is directly linked to the sale of iPhones, as it is far and away the most popular product. The sales for iPods have begun to drop, although Mac sales are still pretty strong, which is surprising considering the popularity of netbooks over traditional laptops and desktops. It’s been one of the few huge corporations that haven’t run home to the government for a bailout – though they aren’t without critics. Still – the http://personalmoneystore.com/moneyblog/2009/10/19/apple-earnings-b… Apple earnings of the last year make it obvious that many consumers are still willing to get instant cash loans for Apple products.
Maybe in USA, but over here in Europe the iPhone is still loosing out to Nokia, Sony Erricson and WM powered devices.
Don’t get me wrong, for a new comer to the market, the iPhone has had a storming success. But it’s still far from being the market leader.
78% of profits in the Smartphone market of late is going through the iPhone.
Selling billions of throw away phones isn’t making Nokia profitable.
So you’re saying Nokia should focus their business on over-priced handsets that pretty much perform the same functions as their cheaper counter parts except for pricing most consumers out of the market?
Nokia should focus on continuing to exist and not hemorrhaging cash. If they had to drop their entire consumer line for the sake of becoming profitable, they could do that. In this game, profitability matters, only Apple seem to be succeeding with that, with just one handset. I could not begin to count the number of handsets out there.
FYI: If you do your accounting correctly, you will see that Nokia is actually profitable. Last results are mired in NokiaSiemensNetworks write-offs.
You are forgetting that Apple success with the iPhone is self evident.
Self evident of what? That most consumers are still buying Nokia and WM handsets?
We’ve already addressed the point that Apples success isn’t as significant outside of the US.
Most people who buy a phone in the high-end segment buys a Nokia and RIM. Probably a 1 or 2 million of the sold Iphones are upgraders from previous versions.
The competition will be more aggressive, and Iphone has not evolved much since the 2G version. What 3G and 3GS brings stuff that the competition has had for years now.
Really? Last time I checked selling millions of throw away stuff can turn into a very nice profit. See all discount retailers as an example. Volkswagen is alive and making profits, even though they are the “throw away Nokias” of the automobile industry, while Ferrari would is the “premium Apples” and are small and insignificant.
Is this US numbers? I’ve searched google and the highest number I’ve found is 32%. Most numbers are around 25%, which is already quite a big achievement for Apple with its relatively small market share (in units).
Edited 2009-10-29 15:49 UTC
No it is a made up number. The 25% and 32% are the “official” numbers ( from Apple marketing ).
Well, the 32% figure I’ve found is a fake. It takes profit loss from Motorola and others as a negative profit market share. So, if you add all the real profits, you end up with more than 100% and you have to substract Motorola and other’s loss to get back to 100%. It means that 32% is not really 32% but rather 32/150 (I don’t know the real number, I put 150 for example)
Even the 25% figures does not seem likely, as it counts the iPod as a smartphone (judging by the revenue numbers).
I believe Apple is making good profit, but the 78% figure is very unlikely.
Anyway, by the number of units sold, the iPhone market share is between 1 and 2%. It is still a very nice phone, but I don’t understand why some people have to make it sound like it was going to take over the world.
Nokia makes good profit on all phones they sell. Actually “smartphones”, because there is no clear definition what is smartphone, had highest profits for long time. Nokia makes good profit because it pays less on components, it’s active researcher of new techniques, it has one of best logistics and warehouse management in world and big brand all over world. Apple has very low brand awareness in almost every else except North America.
Nokias biggest problem is design and shifting to high computing power phones. As for news I think one line clearly shows that this case is just about money: “and that the Company [Apple] has the right to license these patents from plaintiff [Nokia] on fair, reasonable, and non-discriminatory terms and conditions.”
For most of the world, Nokia’s decision to primarily focus on modest computing devices was the right choice until now. But you’re right, times are changing, and it needs to adapt beyond patent licensing.
Yep. Apple and Nokia have probably already talked about licensing previously, Apple didn’t get the terms it wanted, so it just went ahead with its product rollout. Apple has done this before, for example i the face of the Cisco claim that it owned the “iPhone” trademark. These cases usually get settled. It will be interesting to see how willing Nokia is to settle.
You are so right.
Now Nokia will reorganize their Smartphone business, and they have new managers from Apple and Dopplr. It will also be an separate entity inside the Device division, that will give more freedom and better integration, and on top of all a more accurate ASP. It has superior logistics and huge economics of scale, one of the worlds top R&D companies with a key patent portfolio. Nokia is the top of mind brand on all key markets and has a global brand value of 34 864 MUSD or 5th places.
They have a good line of high powered computer like devices, after all Nokia started the Smartphone revolution back in 1996 with its communicator line. They have key knowledge of power consumption, the coming OMAP 3 phones will have serious power and N900 is a good example of those high end computer like phones. N97 mini and X6 should sell very well, probably better then their predecessors do to free music that comes with them, and the freescale chips is powerful and it has really low power consumption.
Nokia 3Q sales and other facts.
Net sales: 9 810 MEUR. Devices and Services 6 915 MEUR, NAVTEQ 166 MEUR, NSN 2 760 MEUR.
Operating profit: 741 MEUR. Devices & Services 787 MEUR, NAVTEQ 43 MEUR, NSN -53 MEUR.
Operating margin: 7.6%. Devices & Services 11.4%, NAVTEQ 25.9%, Nokia Siemens
Networks -1.9%.
Patents of current standards
GSM 45 percent of GSM standard.
UMTS (WCDMA) 30 percent.
CDMA2000 13 percent.
Edited 2009-10-29 17:17 UTC
It is funny how Apple can be so fanatically afraid of theoretically possible (but no indication of) submarine patents in the Theora codec that they refuse to support it in the video element.
While they risk their business completely by simply ignoring any patents related to the GSM area?
hypocrisy
(edit: minor typo)
Edited 2009-10-29 21:26 UTC
Submarine patents can (and have) happened with any tech, thats just Apple’s excuse.
Apple’s real reason for not being interested in Theora is that they already own some of the H264 patents, and they are a party to the MPEGLA organization, so they already get some of the patent royalty pie.
Helping make H264 more popular automatically means more money for them (with little further effort).
I know. It is obvious. But the hypocritical part is when Apple use the submarine patents as an excuse to not include Theora in their video implementation.
http://lists.whatwg.org/htdig.cgi/whatwg-whatwg.org/2009-June/02062…
They should be honest and say “we oppose an open, free, baseline format, because we cant make money from it”.
Btw, i think this lawsuit is going to cost Apple big time. Somewhere in the same magnitude as all their iPhone earnings.
Why? Because this is exactly the kind of situation the patent system is designed to protect companies from. New companies entering the market, stealing decades of R&D.