Nokia to sue Apple over iPhone dispute

Did Apple breach Nokia patents?

A few days ago, we reported how Nokia's inability to get a smart-phone on the market has seen their sales suffer, whilst the likes of Apple's iPhone and Research in Motion's Blackberry go from strength to strength. However today, Nokia has announced it is suing Apple for infringing patents on mobile phone technology for the iPhone.

Is this a legitimate claim or Nokia attempting to claw its way in to the smart-phone sector through lawsuits?

In its claim, Nokia has stated that it has not been properly compensated for its technology and that Apple has tried to "get a free ride on the back of Nokia's innovation". It has claimed the iPhone creators have infringed on 10 of their patents including wireless data, speech coding, security and encryption.

Apparently, the patent breaches apply to all iPhone models since the smart-phone launched in 2007.

Free ride?

Now the most obvious question is that, since the iPhone has been around for close to 3 years, what has taken Nokia so long to declare the product a breach of their patents? And isn't it a bit strange that they are announcing this lawsuit just as they've posted their first quarterly loss in a decade due to falling sales?

Despite being the largest provider of mobile phones in the world, Nokia has seen a net loss of USD$1.4 billion over the July to September quarter compared with a $1.8 billion profit during the same time last year. Much of this has been attributed to the success of smart-phones like the iPhone.

However, Nokia, the world's biggest mobile phone maker, has said that it signed agreements with over 40 firms including most mobile phone handset makers. The deal stated that they were allowed to use the firm's technology, but apparently Apple had not signed the agreement.

"The basic principle in the mobile industry is that those companies who contribute in technology development to establish standards create intellectual property, which others then need to compensate for," said Ilkka Rahnasto, vice president of Legal & Intellectual Property at Nokia.

"Apple is also expected to follow this principle."

Last resort

Rahnasto also stated, to the BBC, that the Finnish company had invested approximately USD$60 billion on R&D and Apple had taken advantage of that without proper compensation. In comparison, Apple have reported profits of $1.67 billion in the past quarter, mostly due to a 7 percent growth in iPhone sales.

Another Nokia spokesman said to the Times that the lawsuit had been a "last resort", suggesting that the issue has been in dispute since the iPhone went on sale two years ago, and had somehow amazingly stayed out of the press.

Apple has yet to comment on the allegations, but if Nokia's lawsuit is successful, it could see the company bolstering its figures simply by taking a cut of every iPhone sold by Apple. Any backdated settlement could amount to hundreds of millions of dollars.

However, the case is expected to take two years to get to the courts.

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