Telecom & Wireless

Apple-Nokia Patent Wars Heating Up (AAPL, NOK, QCOM, BRCM, RIMM, RMBS)

Patent lawsuits are nothing new in the world of technology.  And the patent suit from Nokia Corp. (NYSE: NOK) against Apple Inc. (NASDAQ: AAPL) may have just taken a turn.  Apple announced this morning that it has filed a countersuit against Nokia alleging that Nokia is now infringing 13 patents owned by Apple.  It was just in late October that we saw how the well-known analyst Gene Muster from Piper Jaffray said that the Nokia claim could cost Apple $1 billion.  Based upon today’s move, Apple is determined to not allow that to happen.

Bruce Sewell, Apple’s General Counsel, said, “Other companies must compete with us by inventing their own technologies, not just by stealing ours.”

Patent suits are nothing new.  Ask QUALCOMM Inc. (NASDAQ: QCOM) about its suit against Nokia on GSM technology patents.  Or the Qualcomm suit against Broadcom Corp. (NASDAQ: BRCM).  Both of these have been settled as far as we are concerned, but you never know about tomorrow.

Research-in-Motion Ltd. (NASDAQ: RIMM) has ongoing patent cases, and it took years to get its NTP patent suit behind it.  That cost R-I-M more than $600 million.

Rambus Inc. (NASDAQ: RMBS) is another patent machine.  In fact, its architecture machine is broad enough that we aren’t sure on the surface if Rambus spends more on legal costs than it does on R&D depending upon which quarter or year it is.

This hardly even scratches the surface on technology patent cases.  Billions have been paid out this decade alone by companies and many of these patent cases have turned bright people with no operations whatsoever into instant millionaires by their thought of coming up with an idea, putting as detailed and broad uses onto paper, and submitting the paperwork to the US Patent & Trademark Office.  This costs less than $400.00 for a basic patent filing package at LegalZoom, although the fees for utility patents versus provisional patents and ‘patent pending’ vary greatly and can cost far more at the filing level.

Apple held close to $34 billion in cash as of September 30, 2009 if you include its long-term investments, and that figure should grow closer to $40 billion in the coming quarters if it does not deploy it in acquisitions.  Either way, Apple is determined to not let Nokia get too much of that cash.  How this one turns out will be an ongoing development for quite some time.

Jon C. Ogg
December 11, 2009

Find a Qualified Financial Advisor (Sponsor)

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.