California
23 December 2016
Reporter: Mark Dugdale

Nokia and Apple resume hostilities


Nokia has lodged complaints against Apple in the Regional Courts in Dusseldorf, Mannheim and Munich, Germany, as well as in the US District Court for the Eastern District of Texas.

Apple stands accused of infringing 32 patents in total, covering technologies such as displays, user interfaces, software, antennas, chipsets and video coding. Nokia said it’s in the process of filing further actions in other jurisdictions.

The companies agreed a licensing deal and an end to hostilities in 2011, but that deal didn’t include these new patents.

Ilkka Rahnasto, head of patent business at Nokia, said in a statement: “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.”

“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.”

The suits swiftly follow Apple’s anti-trust lawsuit, which was filed on 20 December in the US District Court for the Northern District of California against Acacia Research Corp and Conversant Intellectual Property Management. It claims that Nokia and the patent licensing companies are colluding to extract royalties from Apple.

According to Apple, Nokia divested a significant portfolio of patents before it sold its mobile device to Microsoft. It shared these patents among a group of licensing companies, but retained a stake in any royalties they extracted in the future.

“With its cell phone business dying, Nokia began to seek out willing conspirators and to commence its illegal patent transfer scheme in full force; that scheme has continued in full effect to the present,” Apple claimed in its complaint.

“The driving force behind Nokia’s strategy was to diffuse its patent portfolio and place it in the hands of patent assertion entities. Acacia and Conversant were its chief conspirators. Nokia stands as the hub of a network of collaborator patent assertion entities that receive patents from Nokia, and its chief co-conspirators Acacia and Conversant then scatter those patents among their own webs of shell companies.”

Crucially, these patents included some deemed to be standard-essential, allowing licensing companies such as Acacia and Conversant to ransom them for taking licences to other rights, according to Apple.

“For declared standard-essential patents, the patent transfer scheme provides Acacia, Conversant, and Nokia an enormous additional illicit benefit: it enables Nokia to escape all constraining effects of Nokia’s promise to license those patents on fair, reasonable and non-discriminatory terms. And Acacia’s, Conversant’s, and other patent assertion entities’ sharing of the supracompetitive fruits of this evasion drives the very economics of the conspiracies.”

A jury in the US District Court for the Northern District of California awarded $7.3 million in damages to Conversant on 15 December, after finding Apple guilty of infringing two smartphone patents held by one of its subsidiaries.

The patents (US 6633536 and 6477151), which protect inventions that improve battery life and signal quality in mobile phones, were filed in 1998 and assigned to Nokia.

Acacia and Conversant have lodged 12 complaints against Apple based on former Nokia patents.

Acacia and its shell subsidiaries themselves have sued Apple more than 40 times in the US and abroad, while Conversant and its subsidiary have asserted more than two dozen patents against the iPhone maker, according to the anti-trust complaint.

“Apple brings this action to address the harm it has already suffered from the violations of federal anti-trust and state unfair competition laws and breaches of contracts,” the company said in its complaint. “Apple has suffered damages from excessive royalty payments and the costs and burdens of defending against the barrage of patent litigation unleashed by Acacia and Conversant, along with other patent assertion entities.”

“Apple also seeks injunctive relief to put an end to the illegal conduct and the resulting harm to Apple, the broader industry, and US and other consumers, and to unwind the patent transfers that have enabled the anti-competitive conduct described.”

Acacia and Conversant have not commented publicly on Apple’s complaint.

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