Nokia suing Apple

Nokia, the world’s largest mobile phone manufacturer, has said that it is suing its Apple for infringing patents on mobile phone technology for the iPhone.

Nokia is suing Apple claiming patent infringement for GSM, UMTS and wireless LAN (WLAN) standards.

Nokia licenses these technologies to other companies but says Apple has not paid for the right to use them ever.

Ilkka Rahnasto, Nokia’s VP Legal & Intellectual Property, says in a release (posted below), “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…Apple is also expected to follow this principle. By refusing to agree [to] appropriate terms for Nokia’s intellectual property, Apple is attempting to get a free ride on the back of Nokia’s innovation.”

Last week Nokia reported its first quarterly loss in years, while Apple reported very favorable earnings and revenue. Nokia leads the world in handset shipments with a 38% market share while Apple, still relatively new to the mobile market, is gaining share at a rapid rate.

Update: PED Reports: According to Piper Jaffray’s Gene Munster, is 1% to 2% of the cost of an iPhone, or in the worst case, about $12 per unit.

This is the full release:

Espoo, Finland – Nokia announced that it has today filed a complaint against Apple with the Federal District Court in Delaware, alleging that Apple’s iPhone infringes Nokia patents for GSM, UMTS and wireless LAN (WLAN) standards. As a leading innovator in wireless communications, Nokia has created one of the strongest and broadest patent portfolios in the industry, investing more than EUR 40 billion in R&D during the last two decades. Much of this intellectual property, including the patents in suit, has been declared essential to industry standards. Nokia has already successfully entered into license agreements including these patents with approximately 40 companies, including virtually all the leading mobile device vendors, allowing the industry to benefit from Nokia’s innovation.

The ten patents in suit relate to technologies fundamental to making devices which are compatible with one or more of the GSM, UMTS (3G WCDMA) and wireless LAN standards. The patents cover wireless data, speech coding, security and encryption and are infringed by all Apple iPhone models shipped since the iPhone was introduced in 2007.

“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, Legal & Intellectual Property at Nokia. “Apple is also expected to follow this principle. By refusing to agree appropriate terms for Nokia’s intellectual property, Apple is attempting to get a free ride on the back of Nokia’s innovation.”

During the last two decades, Nokia has invested approximately EUR 40 billion in research and development and built one of the wireless industry’s strongest and broadest IPR portfolios, with over 10,000 patent families. Nokia is a world leader in the development of GSM technologies and its evolution to UMTS / 3G WCDMA as well as wireless LAN, which is also demonstrated by Nokia’s strong patent position in these technologies.