Nokia Getting Killed In The Smartphone Market... So Of Course It Sues For Patent Infringement
from the if-you-can't-innovate,-litigate dept
Funny how this works, right? Just a week or so after it's first ever quarterly loss and an admission that it totally screwed up in the smartphone market, Nokia suddenly sues Apple for patent infringement over the iPhone. It looks like the old adage is true again: if you can't innovate, litigate! It's the same story all over again. A company that was a leader in the market but got complacent and lazy, suddenly finds that it lost its lead to a more innovative upstart. Since it's so far behind, even scrambling around doesn't help it to catch up, so it just starts suing over patents.This story nicely highlights a few other points as well. We keep hearing from patent system supporters how the patent system is necessary because, without it, the market leader would always just immediately copy the upstart and "steal" their idea. Of course, Nokia has had two plus years to "steal" Apple's idea, and where is it in the smartphone market? It's not so easy to just copy someone else's idea -- especially if you're a huge player like Nokia, who will often view the disruptive innovator as not being worthy of paying attention to (which basically was Nokia's reaction to the iPhone).
Separately, remember how confused we were when Steve Jobs proudly hyped up the fact that Apple had over 200 patents on the iPhone concept? We've pointed out that it's hardly done anything to stop lawsuits. Apple has been sued over and over and over and over and over and over again for patent infringement. Welcome to the tragedy of the anti-commons, where it becomes impossible to do pretty much anything innovative without facing massive legal costs. Basically, if you build anything even remotely innovative these days, you're going to get sued for patent infringement, probably multiple times. It's become a massive tax on innovation, rather than a lever for innovation.
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Filed Under: innovation, iphone, litigation, patents, smart phones
Companies: apple, nokia
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I wonder if he'll notice
Heh heh. I recognize where this one came from: everyone's favorite AC! I wonder if he has any response, or if he'll just pretend that he never said it.
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Nice sound bite, but a bit over the top.
Apparently Nokia (hardly a troll) invested the time, effort and money to create useful technology solutions pertinent to the cell phone industry, a large number of companies have taken licenses in recognition of Nokia's work, and Apple figures "What the heck. So sue me."
Without expressing any opinion on the merits of Nokia's patents, it does seem as if Apple likes the idea of free riding to save itself R&D dollars that it would otherwise have had to invest.
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Re:
"Otellini is also concerned about U.S. corporate tax rates, which are among the highest in the developed world. (One citation)
"Patents are another concern: "It's just a mess now," Otellini said." (The gem)
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Re:
[citation needed]
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Re: Re:
Now I don't have any idea about Nokia's patents as i don't have the time or real desire to read them, but they do have actual products that actually sell. And if i remember correctly the patents aren't so much for 'smart' phones as GSM phones in general, of which Nokia has many that sell very well.
Also IF Nokia really did have as much to do with the development of GSM as they appear to claim then this case does actually make sense. (strange because i usually don't like patents)
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Sad Indeed
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Re: Sad Indeed
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Re: Re: Sad Indeed
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Re: Sad Indeed
Of course that does not save me money on a patent search for infringement!
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Re: Sad Indeed
Please pay our small licensing fee or we will be forced to litigate.
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They where in talks with Nokia, so they must realize that Nokia has those patents.
If you want to make a GSM phone you have to pay Nokia
If you want to make a CDMA phone you have to pay Qualcomm
They developed the tech and if you want to use it you pay.
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Re: Pay and Pay
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Re: Re: Pay and Pay
Furthermore, if a truck goes on a toll road it pays one toll. There isn't a separate toll for each item carried over.
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Re:
Yes, Johnny...you "have to pay"... the (abstract) concept being discussed is why? Does this benefit everyone? Does it speed up innovation?
Standards-committee politics and shananagans forcing selection of "vendor friendly" aspects as opposoed to the technologically superior ones have made this standard half-assed...and no progress can be made on it since completely obvious (garbage) patents surrounding the standard have been tied to it to keep innovators down!
As for CDMA it is nothing but a Spread Spectrum protocol - nothing innovative has been added. Yet these patents are equivalent to evergreening of this technology discovered in 1941.
This (and Texas being the patent-suit capital) just show how moronic (like Johnny) you have to be in order to support such nonsense!
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how much due you want to bet that the settlement will involve some sort of agrement where each party can use each others patents.
That is what I am waiting for.
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So then, what took them so long?
Did they really sit around for two years before realizing "hey, the iPhone uses our technology" or maybe they decided to wait to see if the iPhone was popular before filing suit, that way they could claim that x% of iPhone sales were due to their proprietary technology that Apple "stole".
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Nokia was in talks with Apple.
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Nokia - Sleeping Giant
With that said...I have to give Apple credit where credit is due. Although I can't stand a greasy large display phone I think they will shift inton second gear once cloud computing goes mainstream....Watch out for their future business server apps!
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Nokia have been loosing market share, but this isn't why they are going after apple. They are doing it because they can.
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While I don't necessarily approve of the patent system as it stands, this seems more like a case of Nokia using litigation to gain access to those "200 patents" Apple has on the iphone. Nokia is about to release their first mobile phone based on Maemo Linux. Maemo Linux,which is about 80% open source and bears none of the Apple App Store style restrictions (transmission bittorrent and Apache webserver ports as well as third party web browsers anyone?), is a variant of Debian Linux. The current version is Maemo 5, and they are planning to have features like multitouch and so forth in the next release.
My bet is that Nokia is trying to use this lawsuit to gain an advantage in negotiating cross licensing agreements with Apple. Given the *current* (sad) state of patent law, this is a strategically sound move on Nokia's part. There is good, even critical, discussion at http://talk.maemo.org/showthread.php?p=355452 . While it's somewhat disappointing that Nokia would be suing Apple, Nokia may not necessarily be trolling, just acting strategically within a bad system.
That said, it might be interesting for Mike to look at the Nokia n900 (and especially it's Maemo 5 operating system) as an example of the trend toward open devices over the long run. iphone->android->maemo as well as the non-economic benefits aspect of the maemo community (several hundred Free/Open Source applications in the Maemo repositories) Aside from this unsettling lawsuit, Nokia appears to be doing many things right (even their own form of connecting with fans (engaging the community of users/geeks in developing the OS and applications) and giving them a reason to buy (the powerful and hackable hardware).
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Nokia is not so much for free software
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I am pro ip, so we usually disagree. Nevertheless, I agree with the above statement. We have gone to far.
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Re: Some Issues With This
Quick things to note here. The loss was not due to their smart phone division (which on it's own made a good profit) but their network division which had a big write off. Nokia still holds worldwide 50% of the market and only went down 2% YOY for the quarter. Not great, but not totally bad as you state.
"It looks like the old adage is true again: if you can't innovate, litigate! It's the same story all over again. A company that was a leader in the market but got complacent and lazy, suddenly finds that it lost its lead to a more innovative upstart. Since it's so far behind, even scrambling around doesn't help it to catch up, so it just starts suing over patents."
Although I do believe this in general, I don't know that in this case this is entirely true. Nokia has been the one to innovate and continues to do so. It is ignorant to suggest otherwise. Their R&D in the cellphone market has exceeded 40 Billion euros, and many of their innovations show up in other phones. Nearly every other manufacturer uses these innovations and licenses them. Nokia has not lost their lead at all, though they have decreased in market share. They are still 3-4 times the size of apple in the smart phone market. And vast majority in the dumb phone market.
"This story nicely highlights a few other points as well. We keep hearing from patent system supporters how the patent system is necessary because, without it, the market leader would always just immediately copy the upstart and "steal" their idea."
This seems like a weird tangent, but if that is the way they present it... (I mostly agree that the patent system is broken). I just don't see this case being a great example of it.
"Of course, Nokia has had two plus years to "steal" Apple's idea, and where is it in the smartphone market?"
50% majority, with the groundbreaking N900 (based off an OS they have been developing since 2005) to be released in November, and Nokia is still selling 17 million smart phones a quarter. They have the 5800, N97, N900, X3, X6, and they have sold a ton of others (N95, E71 etc.) If you take the numbers, YOY, RIM gained 2%, Nokia lost 2%, Other manufacturers lost 11%, Apple gained 11%. I would say most of Apple gains have come at the expense of the other manufacturers, and not so much Nokia.
"It's not so easy to just copy someone else's idea -- especially if you're a huge player like Nokia, who will often view the disruptive innovator as not being worthy of paying attention to (which basically was Nokia's reaction to the iPhone)."
This seems like a general statement with little bearing in reality of this specific situation. I highly doubt Nokia wasn't paying attention to Apple.
"Separately, remember how confused we were when Steve Jobs proudly hyped up the fact that Apple had over 200 patents on the iPhone concept? We've pointed out that it's hardly done anything to stop lawsuits."
So what? Maybe those patents don't hold up. And it is not like Apple has never been a litigious company.
" Apple has been sued over and over and over and over and over and over again for patent infringement. Welcome to the tragedy of the anti-commons, where it becomes impossible to do pretty much anything innovative without facing massive legal costs. Basically, if you build anything even remotely innovative these days, you're going to get sued for patent infringement, probably multiple times."
A definite problem with the system. But I think an equal problem is that R&D costs on the order of which Nokia has spent, which ARE innovative and are responsible for the phones we have today, should be protected especially for a company releases actual products. Although patents typically are too general or broad, companies that actually innovate and patent in the first place and release a product that uses those innovations should be protected. Why should Apple get a free ride on the innovation Nokia spent billions of dollar on and created. Especially when the rest of the market had no problem licensing these (except Qualcomm as mentioned) This is exactly the situation patents should be used. It is not like they are a patent troll with no actual product or R&D.
"It's become a massive tax on innovation, rather than a lever for innovation."
In terms of patent trolls yes, but I think companies that actual spend the money to research and develop these ideas, release the actual products in the market should be protected. Though pantents do have many problems, I don't see this instance as one of those cases.
(In terms of your "disclosure" fun going on, :) , I use a blackberry bold and love it)
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Re: Re: Some Issues With This
Most the innovatative products do not come from Nokia, sorry they make great phones, but they usually make them after others prove out a niche or a feature... other than the N-Gage and well i think it made a stink for true innovation
And the iphones been out for 2 years and Apples already grabbed how much of the market share (even give its draconian software limits and single carriers)... i am willing to be Nokia said when it came out, its novel but not a threat, now it and other like it (palm pre if Palm ever decides to not screw up... but thats another story) are now a pretty good threat...
I know my company just did a switch over on phones, we didnt even consider a Nokia for a smart phone, it was Crackberries and Iphones (basically the tech ppl vs. the upper management ill let you decide who wanted what).
So yes ill give you Nokia has a ton to offer, but i dont think in the oncoming smartphone war (basic handsets will go away at that time and it will be the market) Nokia has fallen behind what you see from Crackberry, Apple, Palm, and some of the others (watch phone LG) its a war they can win but i don't think this is really the way to go about it, or is even feasible... what could they make if they took the money from the lawyers and grabbed like 3 geeks out of college... I BET A FREAKING CRAZY phone...
Later,
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The Finns should stick to motorsport...
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Re: The Finns should stick to motorsport...
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Nokia is pretty much responsible for the smart phone market creation (see Symbian history). Not only the phones, but the technology underneath which this is about. Example: http://en.wikipedia.org/wiki/Enhanced_full_rate
"And the iphones been out for 2 years and Apples already grabbed how much of the market share (even give its draconian software limits and single carriers)... i am willing to be Nokia said when it came out, its novel but not a threat, now it and other like it (palm pre if Palm ever decides to not screw up... but thats another story) are now a pretty good threat..."
13% approx. If you can show one piece of evidence Nokia said anything like that I would like to hear it. Although some PR maybe said that (like Ballmer did) I bet everyone in the phone market was watching Apple. And again, Apple sells the majority of it's phones in the US. You take that out of the equation, and Apple falls by a lot.
"I know my company just did a switch over on phones, we didnt even consider a Nokia for a smart phone, it was Crackberries and Iphones (basically the tech ppl vs. the upper management ill let you decide who wanted what)."
1. I bet your in North America, the only place on this planet Nokia is not at the top 2. iPhones have little presence outside the States, the states being where the majority of iPhones are sold. 3. The plural of anecdote is not data.
"So yes ill give you Nokia has a ton to offer, but i dont think in the oncoming smartphone war (basic handsets will go away at that time and it will be the market) Nokia has fallen behind what you see from Crackberry, Apple, Palm, and some of the others (watch phone LG) its a war they can win but i don't think this is really the way to go about it, or is even feasible... what could they make if they took the money from the lawyers and grabbed like 3 geeks out of college... I BET A FREAKING CRAZY phone..."
Fallen behind? The last two quarters, Nokia has sold more smart phones than Apple ever has. The N900 is the phone to be looking at if you want to see where Nokia is going. Educate yourself and check it out. It is an amazing piece of technology: Excellent Interface build on a well matured OS system (Maemo) with quality hardware and developer support. And I am sure that the amount spent on lawyers is not anywhere near the 40 billion euros they have spent on R&D. You really should educate yourself on what Nokia has been doing. People in NA, the one place where Nokia doesn't have a massive presence, are really in the dark on the stuff Nokia has been doing. Apple seems where it is at, and they have done well and kicked many producers in the butt, but Nokia has not been idle.
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Apple's innovation limited to PR hype.
And then there is the drivel “It looks like the old adage is true again: if you can't innovate, litigate!”. The whole point is it is Nokia who did inventing and even more important taught their invention with a patent. In exchange for teaching they were granted the exclusive right to use THEIR invention for the term of the patent.
As far as I can tell Apple’s innovation is limited to mostly self serving propaganda rationalizing why they should be able to profit from others’ patent properties.
Ronald J. Riley,
I am speaking only on my own behalf.
Affiliations:
President - www.PIAUSA.org - RJR at PIAUSA.org
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.PatentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 / (202) 318-1595 - 9 am to 8 pm EST.
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Re: Apple's innovation limited to PR hype.
Really? I'm curious, Ronald, do you not think the iPhone is an innovative product? After all, before it, no one had put all that together in a single device.
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Re: Re: Apple's innovation limited to PR hype.
Mike, not entirely true. Nokia has has much of what the iPhone had in their smart phones (Webkit browser, Music Player, Apps etc.) There is a reason why they are the majority of smartphones sold.
I would like to ask you, what is really innovative about the iPhone? Where the iPhone innovated (if at all) was in the App Store and that could frankly have been put on any phone, and wasn't much more of an innovation over the existing iTunes setup (evolution rather than revolution). This has little to do with the phone itself. It was not the first store.
Don't take this as agreement for the Ronald's point though. I think most of Apple's success has been simplifying the whole process around the already existing iTunes environment for iPods (basically making an iPod phone dumbed down for consumers), their cult-like followers (not all Apple consumers, just the die-hards who buy anything Apple), their systematic slow upgrades to force new purchases, the lackluster American cellular industry, and their usual marketing prowess. They took all the existing cellphone tech and glossed/dumbed it down as with most Apple products.
Successful, yes. Innovative, not really.
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stop the shilling!!!
If they own the patent, that means they did innovate and at least in this instance Apple didn't. Duh!
Patent reform is a fraud on America...and so are you.
Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.
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Bad article
Nokia has a 35 percent worldwide market share on smartphones, Apple has 13,7 percent. I wouldn't say Nokia has "totally srewed up in the smartphone market".
http://www.ibtimes.com/articles/20091012/iphone-market-share-16-pct-us-11-pct-worldwide.ht m
"Since it's so far behind, even scrambling around doesn't help it to catch up, so it just starts suing over patents."
"Of course, Nokia has had two plus years to "steal" Apple's idea, and where is it in the smartphone market? It's not so easy to just copy someone else's idea -- especially if you're a huge player like Nokia, who will often view the disruptive innovator as not being worthy of paying attention to (which basically was Nokia's reaction to the iPhone)."
First you blame Nokia for suing Apple for patent infringements, and next you blame Nokia not being able to "steal" from Apple in two years. Talk about hypocrisy.
"Apple has been sued over and over and over and over and over and over again for patent infringement."
Didn't it occur to you that in some cases this could tell more about Apple's business practices than about those who are suing. (You are overdoing it with "overs", BTW)
"Welcome to the tragedy of the anti-commons, where it becomes impossible to do pretty much anything innovative without facing massive legal costs."
Do you really know ANYTHING about actual content of the patents in dispute? Do you KNOW that Nokia didn't make large R&D investments into the technology in question? ...I didn't think so.
This is one of the worst articles I have read for a long time.
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Re: Analysis
http://www.engadget.com/2009/10/29/nokia-vs-apple-the-in-depth-analysis/
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