Nokia Intensifies Patent Fight Against Apple (NOK, AAPL)

The patent case between Nokia Corp. (NYSE: NOK) and Apple Inc. (NASDAQ: AAPL) is not new.  But news this morning on the direction which Nokia is willing to take is a move in a new direction.  Nokia announced that it has filed a formal complaint with the United States International Trade Commission.  This complaint at the ITC level alleges that Apple infringes Nokia patents in virtually all of its mobile phones, portable music players, and computers. This is not a small case in scope.  If you took this to nth degree, the pot of gold being fought over is now one giant pot of gold.

Nokia noted that the seven patents in this complaint relate to Nokia’s “pioneering innovations that are now being used by Apple to create key features in its products in the area of user interface, as well as camera, antenna and power management technologies.” Nokia further noted that these patented technologies are important to Nokia’s success for a better user experience, lower manufacturing costs, smaller size, and longer battery life.

Paul Melin, Nokia’s General Manager of Patent Licensing, noted further, “….While our litigation in Delaware is about Apple’s attempt to free-ride on the back of Nokia investment in wireless standards, the ITC case filed today is about Apple’s practice of building its business on Nokia’s proprietary innovation.”

What Nokia is trying to designate here is the first strike and in more than one venue regardless of countersuits.  The ITC direction is usually where cases of this manner would end up.  Frankly, it is hard to know just how much Nokia wants in royalties or whether it is going to ultimately seek total product removal from future sale.  It almost does not even matter what the stated intent is up front, because these cases can take years and change in scope and direction too many times to even count this early in the game.

Usually, at least assuming some closure down the road, these patent disputes end up with settlements and royalties and changes in relationships between companies rather than an outright product removal.  Apple had revenues of $36.537 billion for the year-end September 26, 2009; and it had sales of $32.479 billion for the year-end September 27, 2008.

The pot of gold to fight over is very large indeed.

JON C. OGG
DECEMBER 29, 2009