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Tuesday, December 29, 2009, 08:10 am PT (11:10 am ET)

Nokia lodges complaint alleging Apple in broad patent violation

Nokia said Tuesday that it has filed a complaint with the United States International Trade Commission (ITC) alleging that Apple has been infringing on its patents in virtually all of its mobile phones, portable music players, and computers.
 
In total, Nokia accuses Apple of treading on seven distinct patents to create key features in its products in the area of user interface, as well as camera, antenna and power management technologies. These patented technologies are said to allow Nokia to facilitate better user experiences, lower manufacturing costs, create devices of smaller size and deliver longer battery life. 

"Nokia has been the leading developer of many key technologies in small electronic devices" said Paul Melin, General Manager, Patent Licensing at Nokia. "This action is about protecting the results of such pioneering development."

Tuesday's complain signals an escalation of tensions between two of the world's mobile phone powerhouses. In October, Nokia sued Apple in a Delaware U.S. district court on grounds that the iPhone maker was illegally leveraging technology from 10 of its GSM and wireless LAN related patents for which it has invested over more than 40 billion Euros.

"While our litigation in Delaware is about Apple's attempt to free-ride on the back of Nokia investment in wireless standards, the ITC case filed today is about Apple's practice of building its business on Nokia's proprietary innovation," Melin said.

The world's largest cellphone maker claims it has successfully entered into license agreements with about 40 companies for those initial 10 patents. Industry experts have thus speculated that Nokia is likely seeking compensation from Apple in the form of royalty payments in the range of $6 to $12 per iPhone rather than an injunction that would halt the sale of the touch-screen handset.

Earlier this month Apple countersued Nokia, charging the Finland-based company with "stealing" technology from 13 of its own patents. The suit also alleged that Nokia was attempting to obtain more money from Apple than other companies, in addition to the rights to the iPhone maker's intellectual property — all after the Finnish company had committed itself to nondiscriminatory licensing.

"In dealing with Apple, Nokia has sought to gain an unjust competitive advantage over Apple by charging unwarranted fees to use patents that allegedly cover industry compatibility standards and by seeking to obtain access to Apple's intellectual property," Apple wrote in its complaint. "Nokia needs access to Apple's intellectual property because Nokia has copied and is now using that patented technology."

Apple added that Nokia "remained focused on traditional mobile wireless handsets with conventional user interfaces," while the iPhone revolutionized the way consumers use smartphones.

"As a result, Nokia has rapidly lost share in the market for high-end mobile phones. Nokia has admitted that, as a result of the iPhone launch, 'the market has changed suddenly and [Nokia was] not fast enough changing with it.' In response, Nokia chose to copy the iPhone, especially its enormously popular and patented design and user interface."

As the iPhone has grown in popularity, Nokia has retained its status as market leader, but has lost significant share of the market it once dominated. As recently as August, Nokia's Symbian mobile platform was said to have a 50 percent market share, well down from the 72 percent the platform had in 2006. In the second quarter of 2009, the iPhone represented 14 percent of global smartphone sales.

Though Nokia still controls the market, competitors Apple and Research in Motion are said to have profit margins that far exceed their market share. More specifically, industry analysts declared their belief last month that Apple's iPhone operating profit is the highest in the mobile phone industry, helping it overtake market leader Nokia to claim the handset profit crown during its last financial quarter.