The Christmas period for two companies has been a struggle, as Nokia and Apple escalate a public patent battle. The dispute began with Nokia suing Apple for infringing several mobile patents, pushing the iPhone creator to respond publicly to the allegations.
In 2011, Apple agreed to withhold patent licenses with Nokia after a two-year battle. That agreement has now expired, and Apple Inc. is refusing to extend them.
“Unfortunately, Nokia has refused to license their patents on a fair basis and is now using the tactics of a patent troll to attempt to extort money from Apple by applying a royalty rate to Apple's own inventions they had nothing to do with,” said an Apple spokesperson. “We are standing up for inventors everywhere by fighting this flagrant anticompetitive practice.”
The technology giant claims Nokia excluded some products from its 2011 agreement, transferring the patents to third parties “to be used for extorting excessive royalties.” Apple is seeking damages for such a tactic and says Nokia breached its contract.
Naturally, Nokia has a different perspective. It says Apple “steadfastly refused” to license video coding patents at industry rates. Rather than de-escalating the situation, it launched a new wave of complaints.
The company is now seeking a U.S. import ban over eight additional patents. Nokia is also extending the battle to nine additional countries, reaching a total of 40 patents across 11 countries.
“Through our sustained investment in research and development, Nokia has created or contributed to many of the fundamental technologies used in today's mobile devices, including Apple products,” said Ilkka Rahanasto, Nokia's patent head.“After several years of negotiations trying to reach agreement to cover Apple's use of these patents, we are now taking action to defend our rights.”
The allegations cover a large variety of Apple products, including the iPhone, iPod, Apple Watch, Macs and Apple TV. The video encoding technology allows for high-quality transmission of video over cell networks with a low-bandwidth usage.
Another suit accuses Apple of infringing on a technology that transmits and amplifies radio signals. The third is for translating natural language inquiries into database queries, for use in products like Siri.
However, intellectual property analyst Florian Mueller believes this is a classic case of patent trolling. The former patent activist also believes Nokia will have a difficult time:
“Apple is ready, willing and able to litigate for years if it feels it has to. Nokia's decision-makers may believe that “brute force” is the way to get Apple to pay up quickly, but this approach may backfire,” he says. “What if Apple now decides to prove that it can defeat one Nokia patent infringement claim after the other and get one Nokia patent after the other invalidated? Should that happen, Nokia will have to wait for its payday much longer than it might have thought. Its portfolio might be devalued in the end. And the return might be quite a disappointment.”
Nokia also risks being held as an anti-trust violator, and investigation by the European Commission. The Finish phone maker may struggle to get leverage, both in the US and European jurisdictions.
“Today's announcement by Nokia shows how much of a troll it has become,” said Mueller.