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Nokia Dampens Apple's Big Week With iPhone Lawsuit

If you hadn't noticed, Apple has been having a heck of a week. On top of its record quarterly performance, it introduced a range of new products and its stock hit an all time high. Alas, it wasn't to last. Today, Nokia smacked Apple upside the head with a huge iPhone-related lawsuit.

The real story here is that Nokia and Apple have apparently been unable agree to licensing terms with respect to certain cellular technologies. Since there's no agreement in place, Nokia didn't have much choice but to file a lawsuit forcing the issue.

What's at stake are 10 different Nokia patents regarding GSM, UMTS and Wi-Fi technology that Nokia says are being used in the Apple iPhone.

In a prepared statement, Nokia said, "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."

It sounds like most of the radio technologies used by the iPhone are under question here. Nokia, still the world leader when it comes to making and selling phones, has a huge patent portfolio. It's no surprise that some of the iPhone's innards are related to Nokia's intellectual property.

Ilkka Rahnasto, Vice President, Legal & Intellectual Property at Nokia, contends, "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. Apple is also expected to follow this principle. By refusing to agree to appropriate terms for Nokia's intellectual property, Apple is attempting to get a free ride on the back of Nokia's innovation."

In other words, Nokia wants Apple to pay it what it thinks its patents are worth. Obviously, the two firms have been struggling to reach an agreement. The iPhone has been around since June 2007, a full two years and four months. That should have been plenty if time for the to firms to come to terms, but each must be playing its own game of hardball.

The question is, which team will win.

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