Apple countersues Nokia in smartphone battle

 

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By Reuters

Posted on 14 Dec 2009 at 07:35

Apple has accused Nokia of anti-competitive practices and patent infringement, escalating the legal battle between the two smartphone makers.

Analysts say the dispute, potentially involving hundreds of millions of dollars in annual royalties, reflects the shifting balance of power in the mobile industry.

Other companies must compete with us by inventing their own technologies, not just by stealing ours - Apple

Apple was responding to a suit filed by Nokia in October. That suit accused Apple of infringing 10 Nokia patents for technologies such as wireless data, speech coding and security.

The countersuit heats up the fight between a rapidly growing Apple and the world's largest maker of mobile phones. In court documents, Apple denied infringing the Nokia patents. It said the patents asserted by Nokia were not essential for technology standards used in smartphones. The countersuit was filed in the same Delaware court where Nokia brought its case.

Analysts say Nokia and Apple could take years to resolve their patent dispute.

Patent arsenal

Since Motorola launched a similar attack on Nokia in 1989, the Finnish company has built one of the industry's widest patent portfolios. Only Ericsson and Qualcomm have comparable portfolios.

About 40 companies have entered into license agreements with Nokia, including virtually all the leading handset vendors - except Apple.

Apple claimed that Nokia had engaged in anti-competitive behaviour and did not live up to commitments to license its own technology at fair and reasonable terms.

According to Apple's complaint, Nokia and Apple began licensing negotiations in late 2007 related to certain Nokia wireless communications patents. In subsequent years, Apple claims Nokia boosted royalty rates for the patents to as much as three times higher than what was previously proposed and demanded that Apple grant Nokia a license to certain of its patents as part of the compensation.

"Other companies must compete with us by inventing their own technologies, not just by stealing ours," Bruce Sewell, Apple's General Counsel, said in a statement.

The 13 patents Apple cited in its countersuit involve various computing technologies including graphical interfaces, teleconferencing, power conservation and touchscreen technologies - features popularized by its iPhone. Apple cited Nokia's E71 and its new top-end N900 model as products that infringe its patents.

In response, Nokia said the countersuit does not change anything fundamental in the original case, but noted that it would take time to study the suit. "It [Apple] has infringed our patents since the iPhone launch in 2007," a Nokia spokesman said.

While the battle may drag on, analysts see the companies eventually coming to a licensing agreement. "We can now look forward to a lengthy tit-for-tat exchange between Apple and Nokia as they grind out a deal," said Ben Wood, research director at CCS Insight.