The real patent story behind Apple vs Nokia
December 11th, 2009
Daniel Eran Dilger
Nokia sued Apple, now Apple is suing Nokia; both companies claim the other is trying to appropriate their own technology unfairly. But that’s not really the case at all. The real story isn’t even being reported.
Apple’s own press release only says that the company is countersuing Nokia over “stealing” 13 of Apple’s patents; Nokia originally claimed Apple had similarly infringed on 10 of its patents rather than doing its own innovative research. Digging deeper into Apple’s legal filings however, it becomes clear that all patents are not equal.
It’s not a just case of Apple’s patents being better or more novel. Nokia says its patents are related to GSM and UMTS standards as well as 802.11 WiFi technologies. The problem for Nokia is that the company has already committed itself to license its standards-related patents using “fair, reasonable and non-discriminatory terms.”
When companies pool their patents into open standards as Nokia did, it can benefit the entire industry. It also benefits the contributing companies, who earn royalties on those patents as the portfolio of technology related to a given standard is licensed by other companies.
Without patent pooling within international standards bodies, each company would have to develop its own complete set of technologies without any of the benefits of sharing. There would also be less interoperability between products.
Pooling patents together from multiple companies also allows third-party companies to adapt and deploy technologies originally created by others. This creates competition through cooperation and benefits consumers. Companies like Nokia with expertise in wireless mobile technologies, and companies like Apple with expertise in multimedia and network computing, can combine their talents to create interoperable standards which third parties can license as a package.
Licensed broadly vs private innovation
Nokia, Apple, and many other companies have all contributed to pooled standards such as MPEG video, WiFi wireless networking, web standards, and mobile standards such as GSM and UMTS. Once they pool their technologies into a standard, their intellectual property is now understood to be available at fair and reasonable licensing terms to any company that wishes to use it and pay the established licensing fees, or in some cases, completely free and open.
After Nokia committed its ten patents to various mobile and WiFi standards, it attempted to discriminate its licensing terms against Apple. Due to the success of the iPhone, Nokia wanted more money from Apple then it gets from other licensees, and also wanted open access to Apple’s private portfolio of technology used in the iPhone.
While Apple has contributed a variety of its patented technologies to open standards which are licensed under “fair, reasonable and non-discriminatory terms,” it also has a variety of technologies that are not related to any open standards. These differentiate the iPod and iPhone, and are sold directly to consumers rather than being broadly licensed to other technology companies to use.
Nokia hoped to leverage its pooled patents to gain access to Apple’s private patents, patents Nokia had already began using in its own phones, a grossly hypocritical move after alleging that Apple had stolen its technologies because it wasn’t innovative enough to develop its own.
So this is not a case of tit-for-tat as virtually every report so far has suggested. It’s a case of Nokia, finding itself well behind the curve in mobile phones, attempting to extort unfair, unreasonable, and discriminatory licensing terms against Apple for patents which Nokia has already committed to license under fair reasonable and nondiscriminatory terms.
Another interesting take away here is that Nokia isn’t the only company stealing Apple’s technology. Pundits cheered when when Palm did it, and they’re giddy at the prospect of Android stealing more and more of Apple’s intellectual property.
And while the industry rags all complained that Apple was going to stifle competition in the industry by going after Palm, Apple didn’t. And earlier, when it was claimed that Apple had a “killer patent” it would use to destroy every competitor to the iPod… that didn’t happen either. and when pundits fretted that Apple would use its multitouch patents to kill innovation and smart phones… that didn’t happen either.
Instead, Apple only responded to Nokia after that company launched a highly publicized assault on the iPhone, one which was celebrated and cheered on by Nokia’s fanboys and much of the technology press in general. Clearly, Apple prefers to win in the marketplace and is only using its patents defensively. So pundits, chew on that before scribbling up your next missive about how Apple may destroy the world via its patent holdings.
I’m still feeling terrible, although I’m beginning to heal, and I have successfully dictated my first article using MacSpeech Dictate, as I can’t really type. I’m feeling awfully lucky.