Nokia Goes Nuclear In Mobile Patent Licensing Rematch With Apple

Nokia, once the top seller of cellular phones in what feels like a lifetime ago, is suing Apple over claims that its popular iPhone handsets infringe on several mobile patents owned by the Finnish company. The lawsuit is a result of Nokia failing to convince Apple to renew licensing agreements inked in 2011 that are about to expire. Nokia sought to extend those agreements, and had Apple been willing, there would be no lawsuit.

Having sold off its handset business, many wondered if Nokia would turn to more aggressively pursuing patent agreements and litigation. A sign of things to come might have been hinted at when Nokia purchased Alcatel-Lucent's hardware portfolio for $16.6 billion last year, a move that gave it more ammunition to go after companies in pursuit of license agreements. The division of Nokia that licenses patents accounted for 40 percent of the company's total adjusted profit quarter.


From Apple's vantage point, Nokia has morphed into a "patent troll" seeking to gouge companies with high royalty rates to avoid being sued.

"Unfortunately, Nokia has refused to license their patents on a fair basis and is now using the tactics of a patent troll to attempt to extort money from Apple by applying a royalty rate to Apple’s own inventions they had nothing to do with," Apple told Bloomberg. "We are standing up for inventors everywhere by fighting this flagrant anticompetitive practice."

Apple faces two lawsuits from Nokia and its Alcatel-Lucent USA unit. The lawsuit accuse Apple of violating patents pertaining to its iPhone, iPad, iPod, Apple Watch, Mac systems, and even its Apple TV set-top box.

Nokia said in its complaint that Apple "steadfastly refused" to license patents related to video encoding that allow for higher quality transmissions at lower bandwidths over cellular networks. Apple also faces 10 patent infringement claims from Alcatel-Lucent USA that mostly deal with transmitting and amplifying radio signals, along with a patent dealing with language translation.

"Through our sustained investment in research and development, Nokia has created or contributed to many of the fundamental technologies used in today’s mobile devices, including Apple products," Nokia's patent boss Ilkka Rahnasto said. "After several years of negotiations trying to reach agreement to cover Apple’s use of these patents, we are now taking action to defend our rights."

Apple and Nokia avoided litigation in 2011 after arguing for two years about patent royalties and finally coming to an agreement. However, Apple says Nokia soon began concocting a plan in secret to monetize patents that weren't part of their agreement.