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Nokia: Apple wants a free ride

Nokia is suing Apple for 10 counts of patent infringement, pointing to wireless technology patents owned by the Finnish manufacturer.

Phones

Nokia is suing Apple for 10 counts of patent infringement, pointing to wireless technology patents owned by the Finnish manufacturer.

(Credit: Apple/CBSi)

According to a statement from Nokia, all models of Apple's iPhone includes technology for which Nokia owns the patents, including GSM, UMTS and WLAN technologies for speech coding, security and encryption.

"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, Nokia vice president for legal and intellectual property. "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."

Nokia estimates that it has spent over €40 billion in research and development and currently hold patents for over 10,000 intellectual properties. Nokia has agreements with a large number of the other phone manufacturers regarding the use of these technologies, and says that it has unsuccessfully sought such an agreement with Apple and that filing this lawsuit was a last resort.

It's unclear what compensation Nokia is seeking, though Apple analyst Gene Munster told CNET.com that he believes Nokia would hope for 1 or 2 per cent of all iPhone sales to date, which could add up to US$408 million based on the 34 million iPhones already sold worldwide. It is also known that Nokia has called for a halt of iPhone sales, though the general consensus is that Nokia would not intend for the iPhone to be pulled from stores altogether, just remuneration.

"There are companies that are patent trolls, that don't participate in the creation of technology, or they secretly acquire them. Nokia's not one of these companies. They're pretty upfront about the patents they own," noted Jason Schultz, director of the Samuelson Law, Technology & Public Policy Clinic at the UC Berkeley School of Law. "They're probably not trying to put Apple out of business ... but force Apple to play the same game that every other phone company has to play."

For more details on the lawsuit filed and the possible outcomes for both Nokia and Apple, check out "Nokia sues Apple for patent infringement" on CNET.com.

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