Nokia sues Apple over patent violations as legal battle erupts

PUBLISHED : Thursday, 22 December, 2016, 6:24am
UPDATED : Thursday, 22 December, 2016, 9:40pm

Nokia Oyj sued Apple in Europe and the US for infringing on “a number” of Nokia patents, turning simmering tension between the two companies into a public legal battle.

The Espoo, Finland-based company said that since agreeing on a license that covered certain Nokia patents in 2011, Apple declined offers to license further patented inventions for its products.

Nokia filed its complaint with the German Regional Courts in Dusseldorf, Mannheim and Munich, and in federal court in Marshall, Texas.

“Apple has regularly fought to keep royalty rates low, whereas Nokia is interested in getting as much value from its intellectual property as possible,” said Matt Larson, a litigation analyst at Bloomberg Intelligence. “This is a big deal, especially for the future of licensing revenues on standard-essential patents.”

Nokia’s American depositary receipts declined 2.6 per cent to US$4.78 in New York. The company’s shares have dropped 30 per cent this year in Helsinki.

“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,” Ilkka Rahnasto, head of Nokia’s patent business, said in a statement. “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.”

In 2011, Apple and Nokia settled a two-year battle over patent royalties for mobile phones. Nokia stopped making phones after that, but kept patents related to that business.

Apple sued a group of patent-holding companies Tuesday in federal court in San Jose, California, over antitrust claims. Apple alleges the companies conspired with Nokia “as part of a plan to extract and extort exorbitant revenues unfairly and anticompetitively from Apple and other innovative suppliers of cell phones, and ultimately from the consumers of those products.”

Apple claims that after it entered into a cross-license agreement with Nokia in 2011, the Finnish company launched “secret plans to monetize” patents that weren’t part of the accord.

Apple said Nokia has transformed itself out of desperation, based on its own “failure as a supplier of cell phones.”

“It changed from a company focused on supplying cell phones and other consumer products to a company bent on exploiting the patents that remain from its years as a successful cell phone supplier,” Apple said in the complaint.