Nokia surprised the industry by smacking Apple with a patent infringement suit. The Finnish company claims that the iPhone violates ten of Nokia’s patents regarding technology behind smartphone connectivity. From the Nokia press release:
“The ten patents in suit relate to technologies fundamental to making devices which are compatible with one or more of the GSM, UMTS (3G WCDMA) and wireless LAN standards. The patents cover wireless data, speech coding, security and encryption and are infringed by all Apple iPhone models shipped since the iPhone was introduced in 2007.
“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, Vice President, Legal & Intellectual Property at Nokia. “Apple is also expected to follow this principle. 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.”
While this seems like another frivolous patent suit on the surface, Nokia has licensed this technology to forty companies comprised of most of the smartphone players. Nokia has been in negotiations to license the technology to Apple who according to Nokia is refusing to play ball. According to GigaOM, Nokia is asking for 1 to 2 percent royalty on every iPhone sold since 2007. It sounds like Apple may have a hard time getting out of this mess without writing a big check to Nokia.