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Apple Seeks To Ban Nokia Imports To US
Hugh Pickens writes "Cnet reports that the ongoing patent battle between Apple and Nokia has escalated, with Apple moving to block imports of Nokia cell phones to the US by filing a complaint with the International Trade Commission, an independent federal agency that examines issues including unfair trade practices involving patent, trademark, and copyright infringement. In December, Nokia filed its own complaint with the USITC alleging that Apple infringes seven Nokia patents 'in virtually all of its mobile phones, portable music players, and computers' and sought to ban imports of Apple's iPhone, iPod, and MacBook products. Responding to Apple's latest move, Nokia spokesman Mark Durrant told Bloomberg that 'Nokia will study the complaint when it is received and continue to defend itself vigorously. However this does not alter the fact that Apple has failed to agree appropriate terms for using Nokia technology and has been seeking a free ride on Nokia's innovation since it shipped the first iPhone in 2007.' An ITC investigation is a lengthy process, but it's possible that Apple and Nokia might reach some sort of settlement as suits continue to escalate between the two companies."
Is it really cheaper to sue for peace? I mean, can't the legal teams for both companies see this down the road and come to some sort of mutual agreement in advance? It'd sure save a lot of time and money, not to mentioning freeing the courts a bit. Why is it acceptable policy to sue instead of discussing?
I live in constant fear of the Coming of the Red Spiders.
In all fairness, this is a response to Nokia's filing last month to ban Apple imports. So so far it has been:
Nokia sues Apple
Apple counter sues Nokia
Nokia seeks to ban Apple Imports via ITC
Apple responds by seeking to ban Nokia imports via the ITC
info from Bloomberg: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ao_5HVbD_IRM
Bad Panda! No Bamboo for you! In matters of importance ACs will not be responded to. Want to say something critical,OK
Because patents actually do spur innovation and research. The US patent system is broken, do not assume that patents are useless because people use them wrong. It's like saying a car is useless because some people cant drive properly. Nokia is at the forefront of cellular hardware R&D, they are hardly the patent trolls Apple fanboys are making them out to be.
Calling someone a "hater" only means you can not rationally rebut their argument.
Nokia is at the forefront of cellular hardware R&D, they are hardly the patent trolls Apple fanboys are making them out to be.
Nobody is accusing Nokia of being a patent troll. Everybody knows that Nokia is an actual company that does actually sell products.
Nokia's alleged abuse of patent law comes from them trying to charge Apple more than the going rate that it charges to Motorola or Samsung or RIM for the same tech. That's just anti-competitive, plain and simple.
The idea behind patents is that you will release the knowledge behind your product or design to the public ("patent", being the opposite of "latent" means something along the lines of "out in the open") in exchange for a temporary monopoly during which time you can recoup the costs of development. Taking the risk of developing a new technology is thus incentivized because you can be assured that your product won't be ripped off and sold for cheap, preventing you from making any profit (or just breaking even) off of what could have been a potentially expensive period of R&D beforehand. That's why it makes sense to have patents.
It doesn't make sense to patent trivial things, or have patents that take a long time to expire. These squash innovation because they prevent *others* from using new technologies to make even newer technologies. There has to be a balance between slowing innovation slightly and making sure that innovation is not a huge risk.
The summary is a good example of a situation when patents really shine at what they are: a handbrake on innovation. Consumer has nothing to gain if a capable competitor is excluded from the marketplace like that. Leading companies will invest in RnD, patents or not, mostly just to keep up with the state of the art, but also because when (by chance), their engineers invent something truly novel and useful, they will have weeks, months, or may be even years before competitors reverse-engineer their product and learn how to build it cheaper. It is clearly not worth for the public to pay the patent enforcement and monopoly taxes unless the patent law strongly boosts the rate of innovation (and even then, is there really a point?).
And we have no evidence whatsoever that the patent system of any kind increases the rate of innovation (the technological leap of the last 400 years is probably mostly due to the fossil fuels, and we are in for another boost, due to the Internet, the holy Grail of communication). We but we have clear examples of monopolistic behaviors, where the cost to consumer can be directly calculated, like in every case when a cheaper competing product is barred from the market.
The reasonable thing to do would be to start decreasing the patent term, while measuring how it affects the rate of innovation. I would not be surprised to see that it doesn't.
More than likely the percentage talks broke down and they are taking it to court. Nokia just went thru this with another big cell player Qualcomm (who nokia accused of charging more than the going rate). It has nothing to do with one or the other using the other inventions. It is just about money. They settled with qualcomm for a big chunk of money going to qualcomm. Which means 'we could go to court and drag it out for years but would loose in the end'.
Apple is playing a shaky game. As Nokia is one of the 800 pound gorillas in that market. It sounds like Apple is trying to get a 'favored' status rate. These guys will not do that as it ends up costing them with other people they charge. They have things in the contracts like 'if someone else gets a lower rate you get the same rate'. Nokia will fight tooth and nail not to go below a certain rate. This magic number is never said outside of boardrooms but everyone knows who is paying what anyway...
The reality is that, globally, Nokia is the larger company with a larger patent portfolio and has been in business far longer than Apple. Apple may have some key patents, but Nokia certainly have more in relation to mobile phone technology. The first patents at issue were ones necessary for GSM operation: without them, no GSM phone. It seems Apple, for whatever reason (possibly to maintain the secrecy of the iPhone development), decided not to sort out licensing before releasing the iPhone. This could be bad for Apple, if Nokia can prove in court that Apple deliberatly infringed on the patents to get the iPhone to market. Sure, Apple is arguing that license terms were not FRAND (as required by the GSM Association), but disagreement with licensing terms is not an exemption to put a product on the market.
Going to the USITC is simply the next step in this legal tit-for-tat. The seven patents at issue in Nokia's filing to the USITC (involving camera, antenna and power management technology) were different to the original ten patents it sued for in October (involving GSM and wireless technology). Apple countersued in December for thirteen patents. I have yet to see if Apple's USITC filing involes the same thirteen patents. If it does, Apple's USITC filing could be thrown out to avoid a situation of double jeopardy. If it doesn't it would be interesting to see what patents are in Apple's USITC filing.
It seems that Apple is trying to force a settlement out of Nokia, but Apple have for more to lose in this situation. Sure, there is a possibility of a ban on Nokia phones in the US, but most of Nokia's market lies outside the US. It is hard to tell what will happen next, but if a settlement is going to happen it won't be soon. I wouldn't be surprised if Nokia's next step is to take the fight international, with a filing in the EU. I can't help feeling that Apple may come out of this battle worse off.
Nope, it's not anti-competitive. What it is though, is in violation of RAND terms, which nokia signed up to when they let their patents become part of the GSM standard.
1) If nokia is an 800lb gorilla, Apple is King Kong – Nokia's market cap is $50bn, apple's is $190bn.
2) Apple isn't trying to get favoured rates, they're trying to get the same rates as everyone else as dictated by RAND terms.
Which brings up a question of how to measure innovation objectively. Should one count inventions per year (what is an "invention")? Products per year? And then there are other factors, some of which can easily make the impact of patents insignificant. A war, an economic crisis, an ecological disaster, or a bad educational system may slow down the research or halt it altogether. An easy access to natural resources, the main one being energy, or a political system which protects free speech will probably greatly increase the rate of innovation. If one cannot adequately measure how the rate of innovation changes with respect to the patent term, then there can be no rational argument for having a patent system at all, since the costs are real and can be calculated directly.
If nokia is an 800lb gorilla, Apple is King Kong – Nokia's market cap is $50bn, apple's is $190bn.
True. But when it comes to phones, Nokia is the 800lb gorilla and Apple is Zippy the Chimp.
Why do I say this?
Nokia can conceivably stop Apple from selling a GSM phone, if they are successful. Apple will have to change the iPhone to run on CDMA networks, such as Verizon's here in the US. But the world-wide market for GSM phones is much larger than the market for CDMA phones. This will limit how well iPhones will sell outside of the US and hurt Apple's revenue dramatically.
In short, Nokia can do a fair amount of damage to iPhone sales.
In return, what can Apple do to Nokia? Stop them from selling phones? I doubt it. Nokia sells plenty of different kinds of phones. They may be able to lop off the top-end phones, but that's about it. I also assume Nokia makes plenty of money off of their patents, so Nokia wouldn't be hurt too badly if Apple stopped them from selling the N97. So if Apple prevails, Nokia may have to make some minor changes to their products, but that's about it.
That's why Nokia is the 800LB Gorilla.
That said, much like Apple licensing the Mac UI to Microsoft, Nokia's "mistake" was agreeing to RAND terms.
Because every other company has agreed to Nokia's terms. I doubt that this would have happened if their claims were without merit. In addition, Nokia has no history of patent trolling. They spend massive amounts of money to research and are responsible for many of the most important inventions related to mobile data transfer. In addition, they license all their patents rather reasonably to all the competitors. Companies like Nokia are why the patent system exists.
So, when Apple suddenly decides not to pay any licensing fees, I trust Nokia a whole lot more.
Problem is, Nokia holds patents on CDMA and general phone concepts as well. No way Apple will be able to sell a CDMA phone without licensing Nokia IPR.
In fact, this fight is not over only the mentioned 10 patents, but covers hundreds of patents. But due to the cost of fighting about all patents, a few key ones are selected for the legal fight. This is standard practice.
Apple has no choice other then creating a licensing agreement with Nokia or leave the market.
Some mentioned 'fair' agreement. Problem is, how much is the value of your patent portfolio. Take for example Ericsson, they hold key patents in cellular technology. 10 of their patents have more value for Nokia then 10 of Apple patents. Apple patents do not apply to e.g. their low end, PC-card/module and network product. (Assuming here Apple patents are in majority covering the field of UI)
I agree that they should take it to the EU, not that I usually support the EU's special brand of crazy that gives them liscence to print money from other peoples accounts (Intel, Microsoft) but it would be fantastic to finally see Apple being held to the same standard as everyone else.
Fining companies for harming the market and consumers is the exact opposite of 'crazy'. Such fines have long-term benefits for everybody big and small alike.
Price fixing, collusion, anti-competitive practises. They are bad. They hurt companies. They hurt consumers in both choice and price.
And if you're alluding to the notion that the EU only fines non EU-based companies: the meme is false. Dozens of other EU companies have been fined on precisely the same grounds. You never heard of it because as far as the US media is concerned, things that don't affect the USA don't exist. That goes for Slashdot too.
Of course Apple want to play by the rules - they are not simply saying "nah nah we don't have to licence Nokia's patents". They are arguing about the nature of Nokia's strong arming (that under the rules that Nokia agreed to when their patented tech became part of the GSM standard they would not be discriminatory in their cross licencing or charging of fees). Apple are claiming that Nokia are breaking those rules and are after far more from Apple than anyone else they licence their patents to. Nokia are, of course, saying that it's all fair and fine. The two don't agree, thus courts get involved. It's not rocket surgery. They will eventually settle and the patents will be cross licenced. Apple aren't seeking to just *not pay* - they just don;t want to be bullied into paying much more than anyone else Nokia has dealt with (and while that in itself is not ordinarily something they can moan about, it is when Nokia created the GSM standard with their patents).
I'd be interested to hear how Apple have "lawyer mobbed" their way out of playing by the rules - do you have any specific citations? I am genuinely curious, although since you seem to think are not held to the same standard as any company in the eyes of the law, I suspect it's just biased ranting.
Disclaimer: I am not rabidly "pro-apple" or "anti-anyone-who-goes-against-apple" - I just tend to actually look at what is being discussed and try not to make sweeping generalisations based on my own bias. I have no idea which way this one will come out - clearly Nokia has put a great deal of R&D into GSM and mobil tech and obviously Apple needs to pay to use that tech. We do not know Nokia's terms though. Apple are claiming that they are (contractually enforceable) unfair - are they? Who knows. That's what the courts are for, as well as some unpleasant grandstanding from both sides.
Yes, that is exactly what he is saying.
Because every other company has agreed to Nokia's terms.
And Apple wanted to agree to the same terms every other company agreed to - but suddenly Nokia wanted more.
Lars T.
To the guy who modded me down from perfect to terrible Karma - Apple haters still suck
Apple does not deliver fundamentally new technology like Nokia; well not during the last 10 years anyways, the Newton was new, original Mac was new, etc.
Applie meditates upon existing technology and works out how to present the technology so that the average user will benefit most. Incremental backups like Time Machine have existed forever, ala rsync, but Apple slapping on a gui with a starscape has saved thousands of users from losing irreplaceable data.
Apple will need to pay royalties for the underlying technology they are using. Indeed, they'll owe Nokia massive damages for the past 3 years, possibly exceeding the total value of all iPhone's sold thus far. Nokia was extremely forgiving by offering merely a cross licensing deal.
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
Evidence would be nice in an accusation.
That's like asking for evidence that WWII happened. Go read up on Apple corporate history.
Also, I guess he is saying that Apple does not "spend massive amounts of money to research"
Apple used to do research and collaborate with universities, but they stopped in the 1990's.
Today, Apple spends virtually no money on research, as you can see from their non-existent research output (=publications, citations), from their lack of hiring in computer science research, and from their lack of interaction with computer science departments. Furthermore, the iPhone and almost all its fundamental technologies were invented elsewhere.
and is not responsible for shaking up the mobile phone market
They are definitely responsible for that.
and giving more power to the consumer.
With what? Lock-in not only to a carrier but to Apple products as well? By disabling such commonplace technology as tethering? By not allowing me to install software on my phone? By having a crippled Bluetooth implementation that doesn't talk to standard devices? Do tell, what power does an iPhone give me that I didn't have before?
Don't get me wrong: Apple does great product design and their products are decent (if premium priced). And Apple's impact on the industry has often been positive overall by getting other companies out of their ruts. But Apple is not the great innovator or inventor they are made out to be, and they deserve neither the credit nor the monopoly that their fanboys want to give them.