Nokia's Plan B: Patent litigation

Litigation and licensing revenue could provide a measure of financial support as the company awaits broader adoption of its Lumia phones. CNET takes a look at some of Nokia's past legal hits.

HTC CEO Peter Chou, and Nokia CEO Stephen Elop shared a panel discussing the prospects of Windows Phone at Mobile World Congress in Barcelona, Spain, in February. Roger Cheng/CNET

Just a few short months ago, Nokia CEO Stephen Elop and HTC CEO Peter Chou sat next to each on a panel to discuss their mutual respect for each other and shared optimism over the Windows Phone platform.

Now, the two are poised to duke it out in the courtroom.

Nokia said today that it had filed lawsuits against HTC, Research in Motion, and ViewSonic, claiming that each has illegally used 45 of its patents relating to all manner of wireless technology.

The quick about-face by Nokia underscores the company's willingness to look for new sources of revenue beyond selling handsets. Indeed, just as Oracle has gone after Google over the use of Java in Android, Nokia is going after some of its competitor. Armed with a healthy war chest of patents, Nokia could lean on its licensing business as the company continues its attempt to break into the smartphone market with its line of Lumia Windows Phones. With its financials still extremely weak , the company could use all the help it can get.

Nokia is just one of many companies jumping into the legal fray. Beyond Google and Oracle, Apple has been a key player in much of the litigation in the wireless industry. Apple has sued a number of Android players, including Samsung Electronics, HTC, and Motorola Mobility. The fracas is such that Google felt it necessary to acquire Motorola, which boasts its own wealth of patents, to protect Android and the company's partners.

Nokia, however, is better equipped than most when it comes to the legal arena, The company has actually faced off with Apple -- and won. Last year, the two companies settled their dispute, with Apple agreeing to pay a one-time fee and a recurring licensing fee to Nokia. While the fee went undisclosed, estimates at the time pegged the payment to be in excess of $600 million.

Nokia hasn't always had the same success. When the company settled its long-standing dispute with Qualcomm in 2008, it ended up having to pay. Nokia had to pay a one-time fee of around $2.3 billion, as well as a recurring fee, to Qualcomm.

Still, given its more recent success against Apple, Nokia has to be feeling confident against HTC, RIM, and ViewSonic. The company certainly needs any financial boost it can get from its lawsuits. The company posted a loss in the first quarter and warned that second-quarter results wouldn't be much better.

The tough results come as Nokia attempts to get its Lumia smartphone in the hands of more consumers. In the second quarter, Nokia launched the Lumia 900 in the U.S. through AT&T , spending a massive amount of money to raise awareness of the phone. Stunts include taking over Times Square for a brief concert, with blue flashing banners touting the Lumia 900, as well as a temporary promotion that gave early buyers a $100 credit -- essentially making the phone free -- as compensation for a glitch found in some of the devices.

While litigation and any possible settlement would come months -- if not years -- away, any such victory could bring an unexpected boon to Nokia. The company certainly needs all the victories it can get.

 

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