Nokia Wins Legal Battle of Attrition with Apple

by Matt Klassen on June 15, 2011

Legal skirmishes in the mobile world are nothing new, as companies continually battle over intellectual property in an ongoing effort to gain competitive edge in a cutthroat market. What is a significantly more unusual, however, is seeing a resolution to these patent lawsuits, as with so many suits and countersuits it can be difficult to wade through the layers of red tape. What is even rarer, though, is when we hear that the loser in such a legal back-and-forth is Apple, a company known for loudly celebrating its victories while quietly burying its defeats.

It was back in 2009 when Nokia first sued Apple over patent infringement, but one of many entries in the tiresome war of attrition that has taken hold of the mobile market. The lawsuit claimed that Apple infringed on ten (10) of its patents, which of course spurred on the legal dance between the two companies we’ve seen so often before.

But just in case you were losing faith in our legal system to actually resolve any of these longstanding complaints, well, continue losing faith, as it looks like the two companies did most of the work to broker a settlement.

While the details are scant and confidential, it looks like Nokia may have found some temporary financial relief—and possibly its lot in life as a patent troll—as it reached a licensing agreement with Apple that sees the latter pay a one time lump sum to the Finnish company (estimated at more than one million USD) as well as an ongoing licensing fee of over ten dollars on each device in question.

In a statement that smacks of insulting effusiveness, Nokia’s CEO Stephen Elop welcomed Apple to the Nokia licensing family, stating, “We are very pleased to have Apple join the growing number of Nokia licensees….This settlement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.” As expected, Apple has declined to comment.

The settlement itself comes after several years of litigation, with both sides suing and countersuing the other in an effort to gain proprietary rights over disputed patents. Nokia started the legal skirmishing in 2009, with Apple countersuing later that same year. The battle escalated when Nokia lodged a complaint with the International Trade Commission that Apple was violating Nokia’s patents in almost every single one of its devices, a complaint that today has been resolved.

So what does this all mean for me and you? For starters, we can be happy that at least one agonizingly slow patent battle has found some resolution, giving us hope that the myriad of other cases will soon follow suit. Other than that, despite the fact that Apple now has to pay Nokia for each iPhone it sells, I would guess that little will change on the consumer end, meaning don’t expect the price of the iPhone to rise dramatically.

With that said, this loss means little for Apple, as while the settlement does allow Nokia access to some of Apple’s disputed iPhone licenses, Apple maintains that none of them are central to the unique operation of its premiere smartphone.

For Nokia, a company that has seen its stock continual slip over the past year, this victory could spell a new paradigm shift for the company—from mobile giant to annoying patent troll—giving the company reassurance that should the mobile game fail, it at least has something to fall back on.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

{ 1 comment }

Rahul Aggarwal June 15, 2011 at 7:52 am

Nokia though facing stiff competition in the mobile communication industry none can underestimate this Finnish giant in terms of its achievement in patronizing its portfolio of intellectual assets. It is a firm’s right to generate revenue from licensing. Apple coming to settlement with the leading wireless handset manufacturer is fair enough as the iphones use 10 patents or so in its making and using. Thus, Nokia can now stabilize in the share market and concentrate on its niche more effectively.

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