ITC Becomes Battleground in Nokia-Apple Patent Dispute
The United States International Trade Commission (ITC) has agreed to investigate Apple's patent claims against Nokia, after already agreeing last month to do the same for Nokia's patent claims against Apple. With dueling lawsuits pending in federal court over the patent disputes, the ITC has become the battlefield du jour.
In the ongoing fight between Nokia and Apple, the claims filed with the ITC seek to expedite the legal process by asking the ITC to intervene. Nokia has requested that the ITC ban all imports of products alleged to be using technologies patented by Nokia, including iPhones, iPods, and even Mac computers. Similarly, Apple has asked the ITC to ban imports of all Nokia products alleged to infringe on Apple patents, including legacy mobile phones using Symbian.
Meanwhile, Apple also stepped up its game in the federal court system with a new legal filing accusing Nokia of deceptive and monopolistic business practices.
In the filing, Apple states "Having suffered losses in the marketplace, Nokia has resorted to demanding exorbitant royalties from Apple for patents that Nokia claims are essential to various compatibility standards."
Apple accuses that Nokia intentionally withheld details of its patents and intellectual property rights while engaging in the creation of industry standards. Once those standards were adopted and embraced by vendors, Nokia then used its patents to demand "unreasonable" royalties for use of the technologies.
At stake are potentially hundreds of millions of dollars of annual royalties for whichever party ultimately prevails. As Apple alluded to in its most recent filing, some feel that Nokia is basically trying to make up for lost market share and lost revenue through litigation and patent bullying, rather than trying to compete head-to-head against the iPhone in the smartphone market.
Of course, it's also possible that Nokia has a legitimate claim and that Apple is simply too arrogant to recognize Nokia's patent claims or pay the licensing fees to use the technologies legally, and that it's "me-too" legal strategy is little more than a distraction and an attempt to force Nokia to reach some sort of settlement for lower royalties than it is asking for now.
The Nokia legal team is earning its retainer these days. Aside from the legal wrangling with Apple over disputed patents, Nokia also launched a lawsuit last fall against makers of LCD screens accused of collusion and price fixing.
The ITC is also keeping itself busy. In addition to the Nokia claims against Apple, and the Apple claims against Nokia, the commission agreed to investigate claims by Motorola against RIM, maker of the popular BlackBerry smartphones. The Motorola case also involves alleged patent infringement, and like Nokia and Apple, Motorola is asking the ITC to ban imports of RIM products.
What does this mean for business professionals that rely on Nokia feature phones or smartphones, or Apple iPhones or Mac computers? Unfortunately, probably nothing.
Certainly, there would be some ripples if any of the ITC investigations results in a ban on imports--whether it be Nokia, Apple, or even RIM. However, the ripple would most likely be short lived--if the ban ever even goes into effect.
What is more likely to happen is that a decision by the ITC will change the stakes and force the hand of one party or the other and a settlement will be reached. Some punitive damages or compensation for past royalties might be paid. Ongoing annual license fees could be collected. Some sort of "amicable" cross-licensing agreement could be used to nullify patent infringement claims in both directions.
What is not likely to happen, though, is any sort of long-term ban on imports of any products, or any price cuts or increases resulting from the legal disputes. Any patent royalties would increase profit and pad the bottom line, but are unlikely to be passed on to customers in the form of cheaper products.
Shareholders may see a rise or decline in stock value depending on which side of the battle they're on, but to end users it's six of one, half a dozen of the other.