Whatever happens in the Nokia Apple patents battle that is brewing, it is unlikely to ever affect whether or not consumers continue to enjoy the Apple iPhone or buy Nokia phones, but a certain amount of profitability is at stake, with Nokia firing the first shots this week, suing Apple in the US.
Nokia has been winning a lot of these legal actions, even in the US, where it is suing, either to say that it should no longer pay someone royalties or claiming that someone should pay them to Nokia. Recent brushes with Qualcomm and InterDigital have both gone its way. But that’s no guarantee this time.
Apple is a different matter. Nokia says that Apple is not paying its royalties for GSM and 3G technologies, and Wi-Fi on a phone ‘ in other words Apple hasn’t paid its dues to be a handset maker. Nokia has cited ten particular essential patents that Apple needs to license, but since these are controlled under the 3GPP standard, they have to be licensed at reasonable prices. We imagine that they are licensed to the people who have supplied components already, but perhaps not directly to Apple.
Even if it has to stump up a few hundred $ millions, that’s only going to add $10 or so to the price of each Apple device, and it can almost certainly countersue.
Although Apple has no basic R&D in the way Nokia has, it has some patents in how it puts together its various touch screens, and how it controls them, which are sure to remain valid. In other words it may not be able to charge for building touch screens, but it can license gesture control and other ideas that it has added along the way. The likely outcome will be that Nokia and Apple end up swapping patent portfolios and no-one pays anyone anything. If anyone does make a payment we suspect it may be Nokia.
Nokia may then be free to build phones more like the iPhone without worrying about Apple suing it in return. However the legal actions may go on for a while, even if they both end up settling out of court.
A Nokia statement said, ‘During the last two decades, Nokia has invested approximately $60 billion in research and development and built one of the wireless industry’s strongest and broadest IPR portfolios, with over 10,000 patent families.’