Clash of the Smartphone Titans - Nokia vs. Apple

Clash of the Smartphone Titans - Nokia vs. Apple

Amanda Branch is a J.D. Candidate at Osgoode Hall Law School, and is taking the Patent Law course.

Clashes between large companies are hardly uncommon, particularly when the salient issue concerns valuable intellectual property. Recently, Nokia has filed a lawsuit in the US against Apple claiming 10 alleged patent infringements involving wireless data, speed coding, security and encryption. Nokia is demanding back royalties on all iPhones sold since the launch in 2007, which could mean that Apple would have to pay Nokia anywhere from $200 million to $1 billion.

Nokia has invested approximately EUR 40 billion dollars in research and development over the past two decades and has agreements in place with 40 firms to allow them to use Nokia’s technology. Nokia says Apple has not signed such an agreement. Nokia has recently posted a quarterly loss, their first loss in over a decade, largely due to customers moving from Nokia models to the iPhone and Blackberry.

Some believe this lawsuit may be a desperate move made by Nokia in reaction to its loss of market share, with others going so far as to hypothesize that this lawsuit would not have been launched had Nokia been making better progress in the smartphone market. Conversely, it is argued the claim could have some merit to it as Nokia has many more patents than Apple, so it is possible that Apple, to some extent, has used some of Nokia’s patents. Similarly, others believe Apple may have a hard time defending their case, as they are a late entrant in the mobile phone market and it would be almost impossible to create a mobile phone without using Nokia’s patented technologies.

Although the case has been filed in a US court, for the purpose of this blog, I will consider the Canadian provisions as the Canadian Patent Act is the focus of Professor Mgbeoji’s Patent Law course. According to section 42 of the Act, the patentee is granted the “exclusive right, privilege and liberty of making, constructing and using the invention and selling it to others to be used”. As stated in the case of Whirlpool v. Camco, if any person, without the consent or permission of the patentee, does any of the exclusive rights granted by section 42, they have infringed the patent and are potentially liable to the patentee. Section 55(1) says that the infringer is liable to the patentee for all damage sustained by the patentee. Therefore, if Nokia is successful in proving that Apple has done something that only Nokia has the exclusive right to do, Apple will be liable for damages.

Much of the focus has been on Apple’s position in this lawsuit. Apple may be able to put forth a defence as allowed by section 59 of the Act. So far, Apple seems to be denying that they have infringed Nokia’s patents. This is certainly a defence, one in which Apple would have the burden of proof to show that the acts complained of did not infringe on Nokia’s patent, or that the scope of Nokia’s claims do not capture the alleged infringement. Apple could also argue they had Nokia’s consent to use the patents; however, given Nokia’s denial of such a licence, and Apple’s denial that they had used Nokia’s patents, this approach seems less likely. In Canada and the US, in order for an invention to be patented, it must be novel, non-obvious and useful, so a line a defence for Apple would be to attack the validity of the patents on the grounds that the invention is not “new”, that the invention is not “useful” or that the invention is “obvious” to a person skilled in the art. Attacking a patent on the grounds of novelty was an effective defence in the case of Gibney v. Ford Motor [52 C.P.R. 140 ] where it was held that the defendant did not infringe a patent because the patent was invalid on the grounds that it was not a “new” invention. Lastly, Apple could create a defence on the grounds that Nokia is not the person entitled to the patent, perhaps because they are not the true inventor (as was the case in 671905 Alberta Inc. v. Q'Max Solutions Inc.).

No matter what defence Apple chooses, it is expected that this case could go on for years with Apple putting forth a persistent and tenacious defence, as they take accusations of infringement very seriously. This case could get particularly complicated as the U.S. International Trade Commission has agreed to look into Nokia’s patent-infringement claims. Analysts argue that a licensing deal may be the best and quickest solution for both companies.