Apple will "vigorously" defend itself against Nokia's patent infringement suit, according to Cupertino's SEC 10-K annual-report filing (PDF) issued Tuesday.
Last Thursday, Nokia filed suit against Apple in the Delaware US District Court, alleging infringement of 10 US patents. In its SEC filing, Apple - aka "The Company" - states that "The Company’s response to the complaint is not yet due," but that "The Company intends to defend the case vigorously."
In its 30-page complaint, Nokia - which, despite recent market-share slippage still ranks as the world's largest mobile phone company - claims that "By refusing to compensate Nokia for its patented technologies, Apple is attempting to get a 'free ride' on the billions of dollars that Nokia has invested in research and development to provide the public with the wireless communications it enjoys today."
Apple's alleged "free ride" is apparently the theme of Nokia's complaint. In a statement issued along with its lawsuit filing, the Finnish phone company's VP of legal and intellectual property, Ilkka Rahnasto, paraphrased the language of the complaint, saying that "Apple is attempting to get a free ride on the back of Nokia's innovation."
Nokia's statement also notes that the company has negotiated patent licenses with "approximately 40 companies, including virtually all the leading mobile device vendors." The lawsuit claims that Nokia made "various offers" to Apple for licensing agreements for the disputed patents - both singly and in a portfolio - but that Apple rejected its offers.
The 10 patents in dispute reach back over 10 years, and although Nokia's complaint states that each patent "is essential to one of more" of the standards GSM, UTMS, and 802.11, the patents appear at first blush to range further than that - including one patent for "A backlight module for an LCD device."
The parents under dispute are the following:
- Data transmission in a radio telephone network (filed October 1996, granted September 1998)
- Method and apparatus for speech transmission in a mobile communications system (filed January 1996, granted January 1999)
- Speech synthesizer employing post-processing for enhancing the quality of the synthesized speech (filed August 1998, granted August 1999)
- Data transfer in a mobile telephone network (filed August 1998, granted March 2002)
- Measurement report transmission in a telecommunications system (filed December 1999, granted February 2004)
- Backlight module (filed September 2002, granted June 2004)
- Method of ciphering data transmission in a radio system (filed March 2000, granted April 2005)
- Integrity check in a communication system (filed October 2001, granted March 2006)
- Reporting cell measurement results in a cellular communication system (filed March 2001, granted August 2006)
- System for ensuring encrypted communication after handover (filed November 2001, granted July 2008)
SEC filings require at least a modicum of even-handedness, and so Apple admits in its 10-K that "Because of technological changes...it is possible that certain components of the Company’s products and business methods may unknowingly infringe the patents or other intellectual property rights of third parties."
The filing continues: "Regardless of merit, responding to such claims can consume significant time and expense." And Apple's legal team is certainly expending a lot of time and expense defending itself. As the filing notes, "At present, the Company is vigorously defending more than 47 patent infringement cases, 27 of which were filed during fiscal 2009."
Legal wrangling over a single disputed patent can be a multi-year affair, as lawyers for each party explore the nooks and crannies of each clause, paragraph, and patent illustration. With Apple committed to "defend the case vigorously," don't expect this complex case to be decided - or settled out of court - until well into the next decade. ®