ITC Staff Side With Nokia Regarding Apple's Patent Claims

[kdarling]

GSM licensing is apparently pretty layered.

Chipset - The chip maker pays for patents related to hardware alone. Those are included when you buy each chip, but only them.

Broadband software - The chip needs DSP/etc software to run on it. So you usually pay for a license to use/modify code from one of a handful of baseband code providers. Can be fixed fee or per-handset, but usually both ways (reportedly Apple did the latter). Again, this is just for the code.

The final product - Just because you bought a chip and software for it, you're not home free, unless the baseband provider has also agreed to pay GSM license fees on your behalf. In Apple's case, they apparently did not. Thus Apple is on the line for those. (*)

If you want a simple analogy, consider Apple's lawsuits about their patent for visual rubber-banding at the end of a screen. Just because you bought a touchscreen and controller chip, and paid someone to do the UI, does not mean you don't also owe Apple if you implement the rubber-banding.

Verizon paid about $6 per EVDO device to get past the Broadcom patent a few years ago. If Nokia is asking similar, it's in line at least.

(*) Another example: there's an open source implementation of GSM code for voice and texting. But the code doesn't buy you GSM rights. Read here for a mind-bending explanation of using this "free" software.

 

[milani]

Nokia is asking for different terms from Apple because Apple has not contributed to the GSM patent pool as much as other players. Apple asked for many different forms of payment, some including patent cross-licensing deals, others pure cash, and Apple wants the same terms as everyone because of FRAND but doesn't contribute as much (what's fair about that ?).

The issue is cost, no one is being overly greedy. Apple are pulling on their side, Nokia is pulling on theres, the truth is somewhere in the middle.

It's sickening that people will paint Nokia as the bad only because Apple is involved. When Apple pulls the same stunts, they are "protecting their IP!" and when Nokia does it "Greedy! Failing company!"

On the other hand, Apple has contributed a great deal to the smartphone market in terms of user interface and experience, which Nokia has admitted to shamelessly ripping off. And, you only have to look at pre-iPhone smartphones to recognize the fundamental shift in UI that Apple encouraged.

I would say that GSM is as core a functionality as the UI for modern smartphones. You can't run complex applications well without a proper UI and usability, just like you can't make calls without GSM. Cross-licensing seems quite fair, to my mind. And, Nokia shouldn't really be able to demand special terms from Apple either. Besides, the UI sells the device as much as the GSM capabilities do (iPhone sales indicate people are willing to pay more for the UI - as the standard GSM does not separate devices).

Apple hasn't contributed to GSM because there is nothing left to contribute. It's a standard now, and innovation isn't necessary (or, perhaps, even possible). Does that mean they should pay more to license its usage? That hardly seems fair or rational (as licensees could be subject to all types of extreme requirements based solely on the age of the patent - the older it is, the less they are probably able to contribute).

 

[KnightWRX]

On the other hand, Apple has contributed a great deal to the smartphone market in terms of user interface and experience, which Nokia has admitted to shamelessly ripping off. And, you only have to look at pre-iPhone smartphones to recognize the fundamental shift in UI that Apple encouraged.

I would say that GSM is as core a functionality as the UI for modern smartphones. You can't run complex applications well without a proper UI and usability, just like you can't make calls without GSM. Cross-licensing seems quite fair, to my mind. And, Nokia shouldn't really be able to demand special terms from Apple either. Besides, the UI sells the device as much as the GSM capabilities do (iPhone sales indicate people are willing to pay more for the UI - as the standard GSM does not separate devices).

Apple hasn't contributed to GSM because there is nothing left to contribute. It's a standard now, and innovation isn't necessary (or, perhaps, even possible). Does that mean they should pay more to license its usage? That hardly seems fair or rational (as licensees could be subject to all types of extreme requirements based solely on the age of the patent - the older it is, the less they are probably able to contribute).

I'm sorry, UIs are a dime a dozen. UI concepts are 0.10$ to the lbs. And Apple hasn't contributed any UI to the market, they've patented their stuff and are aggressively suing other players in the market for infringing those patents.

However, GSM is unique. No GSM ? No phone (unless you want to go the EVDO route, which guess what, still requires patent licenses).

You equating both is quite disingenious seriously. You're making out Nokia to be a bad guy just because they are going after Apple. We get some people on here will side with Apple no matter what, but in this matter, even Apple has admitted the need to license the patents. The issue is cost.

 

[Carniphage]

I'm sorry, UIs are a dime a dozen. UI concepts are 0.10$ to the lbs. And Apple hasn't contributed any UI to the market, they've patented their stuff and are aggressively suing other players in the market for infringing those patents.

Isn't it a little bit odd, that Apples worthless IP has transformed the handset market. And consumers are falling over themselves to pay for this dime-a-dozen UI. To the extent that Apple profit by $280 per handset.

Meanwhile Nokia's invaluable hardware innovations, don't seem to allow it to make more than 8 euros profit per handset. (on average)

If someone was to try to determine the relative worth of these complimentary technologies, one might be tempted to conclude that the software was the valuable part of the handset, and the hardware was a dime-a-dozen.

Perhaps?

C.

 

[aegisdesign]

Meanwhile Nokia's invaluable hardware innovations, don't seem to allow it to make more than 8 euros profit per handset. (on average)

Average across ALL it's phones from the cheapest €20 throwaway to the most expensive €450 N8 smartphone. It adds up though when you're selling 110 million of them a quarter.

As the market shifts to smartphones, that average is going to shift. Nokia's average price is already on the up even though their smartphone average price is down. With their newer more expensive S^3 phones which are all €200+, that can only help the ASP.

 

[Rodimus Prime]

Isn't it a little bit odd, that Apples worthless IP has transformed the handset market. And consumers are falling over themselves to pay for this dime-a-dozen UI. To the extent that Apple profit by $280 per handset.


C.

I might like to point out most of Apples UI has been around for over a decade. It is very similar to palm pilots. Biggest difference is the iPhone has a high defencion color screen and has multitouch but still just same. Monocrome Palms had touch screen interface a lot like the iPhone with single points.

So really it is not that impressive.

 

[cmaier]

I might like to point out most of Apples UI has been around for over a decade. It is very similar to palm pilots. Biggest difference is the iPhone has a high defencion color screen and has multitouch but still just same. Monocrome Palms had touch screen interface a lot like the iPhone with single points.

So really it is not that impressive.

You are confusing the appearance of the home screen with a "user interface." The app launcher is the least of it. The user interfaces - the way the user interface's with the device - is completely different. Stylus vs. finger. Multitouch keyboard vs. graffiti. Pinch-zoom. etc. I owned palms from the first third party palm phone up to the treo 650, and nothing about it was like using an iphone other than picking apps to run from a grid.

 

[Carniphage]

I might like to point out most of Apples UI has been around for over a decade. It is very similar to palm pilots. Biggest difference is the iPhone has a high defencion color screen and has multitouch but still just same. Monocrome Palms had touch screen interface a lot like the iPhone with single points.

So really it is not that impressive.

And if the Smurfs had had giant helicopters. It would have been the same as Avatar.

C.

 

[Carniphage]

Average across ALL it's phones from the cheapest €20 throwaway to the most expensive €450 N8 smartphone. It adds up though when you're selling 110 million of them a quarter.

Not really Nokia is running a pitiful level of profitability, which if it continues, will seem them make losses next year.

As the market shifts to smartphones, that average is going to shift. Nokia's average price is already on the up even though their smartphone average price is down. With their newer more expensive S^3 phones which are all €200+, that can only help the ASP.

The opposite of what you describe is happening.

The market HAS shifted to smartphones. Which is why Apple's single handset makes more money than all of Nokias 110M phones. And as the market underwent this transition, Nokia's profitability fell year on year.

However the patent authorities view the relative merits of UI versus hardware technologies. It is clear the market values user interface more than anything else.

C.