Nokia Claims Apple Does "Legal Alchemy" To Mask IP Theft

CWmike writes "Nokia asked a federal judge last week to toss out Apple's antitrust claims, saying the iPhone maker indulged in 'legal alchemy' when it tried to divert attention from its infringement of Nokia's intellectual property. The filing was the latest salvo in a battle that began in October 2009 when handset maker Nokia sued Apple, saying the iPhone infringed on 10 of its patents, and that Apple was trying 'to get a free ride on the back of Nokia's innovation.' Apple countered in December with a lawsuit of its own that not only claimed Nokia infringed 13 of its patents, but that Nokia also violated antitrust law by legally attacking Apple after it declined to pay what it called 'exorbitant royalties' and refused to give Nokia access to iPhone patents. 'These non-patent counterclaims are designed to divert attention away from free-riding off of Nokia's intellectual property, a practice Apple evidently believes should only be of paramount concern when it is the alleged victim,' Nokia charged in the motion. Apple is on a legal roll, having also recently sued the maker of Google's Nexus One, HTC, for patent infringement."

Comments

I hope Bilski invalidates them all

[linuxrocks123]

Hopefully the Bilski decision will come out and invalidate software patents. Then these companies can get back to competing on innovation.

Re:I hope Bilski invalidates them all

[Anonymous Coward]

Hopefully the Bilski decision will come out and invalidate software patents. Then these companies can get back to competing on innovation.

Note that the patents Nokia are using against Apple are not Software patents, but real technology patents. The fact that Apple has nothing but software patents to respond with is a signal about how fragile Apple in fact is, with no real "valuable" intellectual property.

Re:I hope Bilski invalidates them all

[klingens]

That's a trade secret. For a patent, you have to show how it actually works. No one managed to dissect His Holiness Steve yet.

Re:I hope Bilski invalidates them all

[fuzzyfuzzyfungus]

Is his entire transplant team under NDA, then?

Re:I hope Bilski invalidates them all

[ircmaxell]

Nokia has already paid off its research costs many times over from the sale of cellphones

Sure, for those specific innovations. But R&D is an expensive, time consuming process that leads to many dead ends and few profitable results (if done in the Bell Atlantic method). So they do need to capitalize on the relatively few innovations that are profitable to pave the way for the vast number that are directly profitable (Consider that Bell invented basically DLP way back in the 1970's. Sure, it's a good innovation, but it never paid them profits, because it didn't become economically feasible for decades later).

I think personally software patents are stupid, because the barrier to entry into such a field are so small that it's very hard to realistically say "I'm the first one to ever come up with this idea" and prove it (After all, it could have been part of some student's senior research project in the 70's, but was never "published")... With technologies with a large barrier to entry (especially large barriers to research), patents offer some protection to companies that they can recoup their research costs. Consider the example of someone building computer algorithms for file system interaction. How many man-hours does it take to do that? Sure, there could be a fair number, but probably not man-decades... How many non-human resources are involved? Sure, you do have a few computers/servers/etc, but my guess is MAYBE $10k... Now, consider research into radio protocols for cellphone data. How many man-hours are involved there? Potentially many decades (if you have more 2 or 3 working for any significant amount of time). How many non-human resources? LOTS. FCC licenses, transmitting equipment, diagnostic equipment, potentially hundreds of thousands of dollars (if not millions of dollars). All dedicated (for that particular time at least) to the research. That's why patents exist... To give companies an incentive to do non-trivial innovation... The fact of the mater is (IMHO) for a large number of the software patents that I've seen, the innovation is trivial at best (If not already common knowledge)...

Just my $0.02...

Re:I hope Bilski invalidates them all

[jo_ham]

By RAND terms - in exchange for the GSM patents being included in the standard for cellular communication, Nokia agreed to licence them under RAND terms. Otherwise, they would not have been included in the standard: it's a way to ensure that there is still profit in allowing others to use your work, and enable a standard (which is handy for a large radio communication network)

http://en.wikipedia.org/wiki/Reasonable_and_Non_Discriminatory_Licensing

Read the wiki page - it even uses the GSM patents themselves as an example. Bonus.

It has nothing to do with licensing copies of Windows, which are not covered by RAND conditions.

Re:I hope Bilski invalidates them all

[masmullin]

His DNA is NDA

Re:I hope Bilski invalidates them all

[mjwx]

And Apple want to pay up - they just don;t want to pay more than other cellphone companies to use the GSM patents.

This is a myth.

Nokia is obliged (not by Apple) to licence those patents equally to anyone who wants them,

Only specific patents. Those patents were offered at the same cost as everyone else. However Apple feels entitled to Nokia's entire patent catalouge which is not covered by agreements like RAND and have openly admitted to using these patents without paying fees.

Other manufacturers pay less because they have their own patent portfolio's which are of equal value, these are traded to Nokia for use of their patent portfolio in lieu of cash, Apple has no such patent portfolio so they have to pay cash like manufacturers that do not maintain heavy patent portfolio's like HTC.

Whoops, I said HTC. Apple is now using it's dubious software patents to sue HTC. This is being done entirely as a response to Nokia suing Apple over patents not covered by RAND in an attempt to artificially increase the value of it's own patent portfolio, which is far weaker then Nokia's.

Apple isn't trying to *not* pay - it just wants to pay what other cellphone makers pay.

And that is exactly what Nokia is suing for. Nokia spend years and millions developing this technology, Apple has no technology of equal value so why should Apple get a free ride.

Re:RAND

[kylant]

Have you ever considered that both sides of the story might be true?

Apple has a rather unusual model to sell its phone: From what we've heard Apple demands not only a one-time sales price from the operators (as most other mobile manufacturers do) but also a part of the monthly fee paid by iphone-customers. If Nokia licenses its patents for a percentage of the sales price (a common practice) they could also have asked for a percentage of the monthly fee (and justly so, if you ask me, as Apple just spreads out the sales price over a longer period of time). Apple on the other side might object to being the only GSM-manufacturer that has to pay a monthly fee.

Re:RAND - *IF* you developed it...

[GuyFawkes]

RAND terms only applied IF you developed and contributed to the standard.

RAND terms SPECIFICALLY EXCLUDED everyone who came along afterwards and wanted to use / licence GSM.

Apple DID NOT help develop GSM.

Apple REFUSED to accept non-RAND GSM licencing terms.

These are the facts. These are ALL the facts.

Wrong

[Too Much Noise]

You keep posting these 'facts' about cross-licensing. You're basically wrong. RTF Filing. From Statement of facts, p 4-5

In late 2007, Apple and Nokia began negotiating a potential license agreement for Nokia's patents essential to the ETSI standards (id. 86). Apple admits that, at the start of the negotiations, and again in September 2009, Nokia offered license terms to Nokia's essential patents that did not require Apple to grant any license back to Apple's non-essential patents (id. 86, 91).3 Apple acknowledges its rejection of Nokia's "standard" license terms (id. 85, 91, 92). Apple's unhappiness about these offers seems only to be that Nokia was asking for what Apple considered too much money for Nokia's essential patents (see id. 91).

Apple also admits that "Nokia defined both a portfolio rate and an average per patent royalty rate" that did not require any
license-back of non-essential patents (id. Answer to 44). Once again, Apple's only problem with these offers is the amount of money involved (id. 91).

Again, according to Nokia's filing, there was an offer to cross-license, but it was Apple that first made it.

Apple further admits that it was willing to grant Nokia a cross-license to certain Apple patents that are not claimed to be essential to any of the standards listed above (id. 87). Apple avers that, in Spring 2008, Nokia made another license offer, proposing Apple expand its prior offer to give Nokia the right to pick a limited number of Apple non-essential patents that would be licensed (id. 89). Apple states that it rejected the proposal (id.).

But hey, don't let facts get in the way of righteous anger.

Re:RAND - *IF* you developed it...

[diamondsw]

RAND terms only applied IF you developed and contributed to the standard.

Um, wrong much?

From everyone's favorite source:
"companies agree that if they receive any patents on technologies which become essential to the standard then they agree to allow other groups attempting to implement the standard to use those patents and they agree that the charges for those patents shall be reasonable"

There is absolutely nothing involved in being part of the standards body to receive RAND terms. If you're part of the standards body you have to extend RAND terms.