Nokia is suing Apple over 10 patents the Finnish phone maker says it owns related to wireless handsets.
The largest handset maker in the world is suing the maker of one of the most popular, the iPhone, because, according to a statement released by Nokia on Thursday, Apple has refused to license any of the patents in question. All iPhone models dating back to the original introduced in 2007 are infringing, according to Nokia. Nokia is asking the U.S. District Court in Delaware for an injunction (PDF) on sales of iPhones and for unspecified damages.
"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," said Ilkka Rahnasto, vice president, legal and intellectual property at Nokia. "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."
Nokia has already reached licensing agreement on the patents in question with 40 other companies, including "most of the major device makers," according to Nokia spokesman Mark Durrant. Apple has thus far refused to cooperate, and filing the lawsuit was a "last resort." The two companies have been in negotiations for "some time," he added.
Nokia says it has spent more than $60 billion (40 billion euros) on R&D related to wireless technology. The 10 patents it accuses Apple of violating are related to making phones able to run on GSM, 3G, and Wi-Fi networks. They include patents on wireless data, speech coding, security, and encryption, according to Nokia.
Apple did not respond immediately to a request for comment.
For every kind of technology you can think of (USB, wall plugs, video game controllers) there's an agreed upon standard. It's arrived at by companies making products that use the technology in question in the context of a standards-setting organization. They'll gather, debate over whose patented technology is best, and also agree in advance that every other company in the standard group will be able to license their patent at a reasonable rate.
Apple is one of a few companies--Nokia wouldn't expand on who the others might be--that is not licensing Nokia's 10 patents. Nokia says that for any phone to run on a GSM, 3G, or Wi-Fi network, it would have to license one of its patents.
Though it is asking the court to halt sales of the iPhone, the general consensus by legal observers and those who follow Nokia, is that it's not actually trying to pull the iPhone off the market permanently--injunctions are always used as leverage in these cases--but rather that it wants Apple to pay its fair share.
"There are companies that are patent trolls, that don't participate in the creation of technology, or they secretly acquire them. Nokia's not one of these companies. They're pretty up front about the patents they own," noted Jason Schultz, director of the Samuelson Law, Technology & Public Policy Clinic at the UC Berkeley School of Law. "They're probably not trying to put Apple out of business...but force Apple to play the same game that every other phone company has to play."
Apple analyst Gene Munster thinks Nokia is looking to extract a royalty payment of 1 percent to 2 percent of every iPhone sold from Apple, which would be about $6 to $12 per phone. With 34 million iPhones sold to date, that would be $204 million to $408 million in back payments Apple would have to pay if Nokia were successful in court. There's also the added risk of something called "willful infringement." Basically, if Apple were to be found in violation it'd have to pay three times the amount of whatever the judgment won by Nokia.
Apple could settle out of court, or it could try to show that Nokia either doesn't own the patents or that they're not valid in this case, both of which would be difficult, said Schultz.
"Invalidating 10 patents is a lot, that's like running the Boston Marathon. It's really hard to do. You might get one, two or even five," he said. "But 10 is a lot."
If it does go to court, strap in for a long ride. This kind of case could take up to two or three years of litigation.
This post was updated throughout at 12:35 p.m. PDT.
Apple now has the support of a USB industry standards group in its battle to keep the Palm Pre from using the iTunes music service.
The USB Implementers Forum (USB-IF) said in a statement Tuesday that Apple can block the Pre from connecting to iTunes. The group issued a letter to both companies warning Palm that further attempts to use iTunes would violate the group's policy.
The voice of the USB-IF is strong in this case since the group is responsible for issuing Apple the hardware vendor ID that lets its devices connect to iTunes via USB. Palm has used this process to its advantage by simulating the same ID for the Palm Pre, tricking iTunes into thinking the Pre is an Apple device.
That scheme worked until the recent release of iTunes 9, which broke the Pre's access, prompting Palm to complain to the USB-IF that the vendor ID blocks competitors.
But the group supported Apple's stance and cautioned Palm by letter that any further attempts to use the code would be a violation of its rules.
In its initial complaint, Palm told the USB-IF that the latest update of its WebOS would restore iTunes functionality to the Pre. In response, the USB-IF quoted policy and reminded Palm that it may use only its own issued vendor IDs, not those of any other company. The group asked Palm to clarify its intentions within seven days.
Palm and Apple were not immediately available for comment.
Even before the Palm Pre was released in June, people discovered that the device could connect to iTunes. Since then, Palm and Apple have fought a tug-of-war over iTunes access. Apple has issued various iTunes updates to block non-Apple devices, triggering Palm to find a way past them. Despite not-so-subtle warnings from Apple, Palm has remained persistent.
Apple said Tuesday it has snagged Intel's general counsel to assume the same role in its corporate offices.
Bruce Sewell
(Credit: Intel)Bruce Sewell has worked at Intel since 1995--his most recent role as that company's legal chief and a senior vice president. At Intel, Sewell was responsible for managing corporate policies and hundreds of lawyers in more than 30 countries. Sewell will also serve as a senior vice president at Apple.
Sewell is replacing Daniel Cooperman, Apple's current legal head honcho, who is retiring at the end of September. Cooperman served as general counsel for the last two years after replacing Nancy Heinen, who was investigated by the SEC in connection with Apple's stock-option backdating scandal. (Heinen settled with the SEC last year, admitting no guilt.)
There are several important cases that Sewell will have to oversee as soon as he takes the reins, including the recent FCC inquiry into the rejection of the Google Voice app and the ongoing Psystar copyright infringement case.
On Monday, the departure of another longtime Intel executive was made public. Pat Gelsinger is leaving for EMC after 30 years at Intel.
The iStat app's killer feature has been killed.
(Credit: Bjango)The version 1.1 release of developer Bjango's iStat application for the iPhone last week was marked with disappointment.
To maintain the application's availability on the App Store, Bjango had been told by Apple that it had to remove what was arguably the most compelling feature of version 1.0: Free Memory, which enabled people to clear wired and inactive memory to increase the iPhone's battery life. It also improved the device's performance.
Bjango, which focuses on developing apps for the iPhone, felt that it had no other choice but to create a new version sans the Free Memory feature. iStat 1.1, $1.99, offers only iPhone monitoring. Among other things, users can see battery life calculations and how much memory and disk space remains.
"Apple would not say why we needed to remove the 'Free Memory' feature," Tori Gale, support manager at Bjango, wrote in an e-mail. "(Apple) simply demanded that it was removed, or (it) would delete (version 1.0 of) the app from the store...Nothing iStat did violated the terms of the developer contract, as far as we know, and Apple didn't say that it did."
When pressed for more insight over Apple's ultimatum, Gale had, much to her chagrin, little to say. "Apple really hasn't given us any information," she said. "We simply don't have much we can say."
... Read moreDon Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
Two years ago, Palm's then CEO, Ed Colligan, rejected a proposal from Apple chief Steve Jobs to promise not to hire each other's employees, according to Bloomberg News.
According to Thursday's Bloomberg story, which cited unspecified "communications" between the two executives, Colligan in August 2007 said that Jobs' proposal was ill-considered. Jobs was worried about losing key Apple employees to Palm and said "we must do whatever we can to stop this," reported Bloomberg.
"Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal," Colligan told Jobs, according to the communications reviewed by Bloomberg.
A number of top figures at Palm once worked at Apple. Two months before the August 2007 communications cited by Bloomberg, Palm had announced that former Apple CFO Fred Anderson would be joining its board of directors and that Jon Rubenstein, who retired as head of Apple's iPod division in 2005, would join as executive chairman of the board.
In June of this year, Palm named Rubenstein as its CEO, replacing Colligan.
In August, former Apple staffer Jeff Zwerner became Palm's brand design chief. Other Apple execs who have jumped ship to Palm in recent months include Senior VP of Product Development Mike Bell and PR head Lynn Fox.
There's no love lost of late between the companies, with the Palm Pre a new up-and-comer for smartphone market share against the Apple iPhone. The two have most recently been squabbling over the Pre's compatibility with iTunes.
The Bloomberg story comes as the Justice Department is reportedly checking into possible hiring collusion among leading technology companies.
Tensions often run high between tech companies over executives moving between potential competitors. Apple last year got into a high-profile scrape with IBM over its hiring of Mark Papermaster from Big Blue.
Psystar lawyers have begun deposing Apple executives in the copyright infringement lawsuit brought by Apple last year, the Mac clone maker announced.
Surprisingly, it seems that Psystar executives are actually enjoying themselves. In a Thursday post on its Web site called "A taste of their own medicine," Psystar seems to gloat over the fact it is now deposing several Apple executives. "For the past week and for the following ten days we will be doing depositions of some of Apple's highest level people. After numerous depositions of Psystar employees and associates the shoe is finally on the other foot, oh the joy!"
Apple accused Psystar of copyright infringement after it began making Mac clone computers and selling them with Mac OS X installed. Apple's license agreement clearly states that the operating system can only be installed on an Apple-labeled computer.
Psystar is even allowing its customers to submit questions to ask the Apple executives, according to a report on AppleInsider. The company said it will take the top 10 questions to each executive deposition.
According to the blog post, Apple executives being deposed are:
- Aug. 07 -- John Wright -- OS X -- Senior Software Manager
- Aug. 12 -- Kevin Van Vechten -- OS X -- Software Engineering Manager
- Aug. 13 -- Phil Schiller -- Marketing -- Senior VP Worldwide Product Marketing
- Aug. 14 -- Mike Culbert -- Mac Hardware -- Senior Director
- Aug. 18 -- Gary Thomas -- TBD
- Aug. 19 -- Simon Patience -- OS X -- Head of Core OS
- Aug. 21 -- Mark Donnelly -- Apple -- VP Finance and Worldwide Business management
- Aug. 21 -- Greg Christie -- TBD
- Aug. 21 -- Bob Mansfield -- Mac Hardware -- Senior VP Mac Hardware Engineering
Psystar said these executives were chosen because they are the most knowledgeable in their field.
The company kicked up the rhetoric a notch since changing lawyers in July. Psystar is now being represented by Houston-based Camara & Sibley, which is also defending convicted music-pirate Jammie Thomas-Rasset.
Psystar filed for bankruptcy protection in May, which normally could shield a company from its legal woes. But Apple asked the court to lift the automatic stay of proceedings in the copyright case. Apple won its argument, and a new trial date has been set for January 11, 2010.
Already having raised the ire of some developers and customers, the decision to disallow the Google Voice application on Apple's App Store has also attracted the attention of the FCC.
According to a Dow Jones Newswire report, on Friday afternoon the FCC sent letters to Apple, AT&T, and Google. The federal inquiry asks Apple why the Google Voice application was rejected from its App Store for the iPhone and iPod Touch, and why it removed third-party applications built on the Google app that had been previously approved. The federal commission also asks whether AT&T was allowed to weigh in on the application before it was rejected, and seeks a description of the application from its creator, Google, according to the report. There have been no complaints filed with the FCC about Apple's rejection of Google Voice, so it's not a formal investigation.
Apple did not immediately return a request for comment.
Google Voice is a free application that lets users assign a single number to ring their home, work, and cell phones, and also get voice mail as text transcriptions. Google Voice has been described by some as an "end run" around wireless carriers because it allows for free texts and cheap international calling, but users do still use minutes on their AT&T phone plan.
The letters are apparently part of a broader look at exclusivity contracts between phone manufacturers and wireless carriers. AT&T, for example, is the exclusive carrier for the iPhone in the U.S.
Following the announcement by Google that its application was rejected by Apple earlier this week, some developers, customers, and even a prominent blogger said Apple's decision would cause them to stop using their iPhones, or stop developing for the platform.
I just got my new iPhone 3GS the other day and the first thing I did with it was get it jailbroken, just how I handled my iPhone 3G.
This time around, it was not really because I was in dire need of any extra functionality (the 3GS now can do video recording out of the box, which my 3G could only do when jailbroken). Most importantly, I wanted to feel like I could do anything with a device I paid almost $600 for (I couldn't wait until December to be qualified for the discount upgrade).
Cydia store for jailbroken iPhones, where developers can summit their applications without having to deal with Apple App Store's policies.
(Credit: Dong Ngo/CNET)Little did I know what would constitute "anything" in this case.
Apparently, as Apple claimed via comments filed last week (PDF) I, and my newly freed phone, could be the culprit for AT&T network unreliability and even more seriously, when disgruntled, I could use it as a weapon of mass wireless disruption by taking down AT&T wireless towers. (OK, honestly this revelation makes me feel kind of powerful.)
First reported by Wired.com, Apple's comments explained that jailbreaking allows hackers to alter the phone's baseband processor (officially called the BBP chip), which is the chip that enables the phone to connect to cell towers.
(A personal note: The only purpose of altering of the chip, via software or the hard way, I've known of so far is to unlock the phone, which allows it to work with other carriers other than AT&T. Jailbreaking doesn't necessarily mean unlocking and therefore is very much risk-free.)
Apple stated in its filing that by changing the BBP's code, "More pernicious forms of activity may also be enabled. For example, a local or international hacker could potentially initiate commands (such as a denial-of-service attack) that could crash the tower software, rendering the tower entirely inoperable to process calls or transmit data. In short, taking control of the BBP software would be much the equivalent of getting inside the firewall of a corporate computer--to potentially catastrophic result."
Now this is scary because I've never thought the iPhone--being the "Jesus" phone as it is--would have that capability. I always thought that Apple has been trying to keep it locked simply so AT&T could offer it exclusively in the States, which has been possibly the most successful exclusive offer a wireless carrier has ever had; and so Apple could keep tight control over its App Store, which is also a huge success. How naive and non-vigilant of me!
Another somewhat less serious manifestation of jailbreaking the iPhone that Apple mentioned is the fact that when changing the BBP code, a hacker can also change the iPhone's unique Exclusive Chip Identification (ECID) and therefore enable phone calls to be made anonymously, which "would be desirable to drug dealers".
As for AT&T's service, Apple claims that jailbroken phone owners could be the cause of its reportedly problematic network. This is because these unsuspecting users "encounter functional problems with the phone that result from jailbreaking. Such users often call AT&T to report such problems, believing that they may be the result of problems on AT&T's network. AT&T is then forced to spend significant resources investigating and diagnosing the problems to determine whether, in fact, there is a problem with AT&T's network or service."
This seems to explain why my co-worker Eric Franklin always has a high drop-call rate and bad 3G performance on his never-been-unlocked iPhone 3G. And why my friend in New York who uses a locked AT&T's Samsung BlackJack also has problems with dropped calls. (None of us, by the way, has ever called in to report problems. We just suck it up and have faith that AT&T would someday improve its service.) Now it turns out to be all my fault. (I am sorry, guys.)
What makes me feel a little better for my wrongdoing with my iPhones, however, is the fact that the Electronic Frontier Foundation has asked regulators for the DMCA exemption (PDF) that would allow consumers to run any app on the phone, including those not authorized by Apple. This would basically legalize the jailbreaking practice of the iPhones.
And Apple's claims are its response to questions submitted by the U.S. Copyright Office, which is considering EFF's request.
Editor's note: due to some technical issue, comments left prior to 9 a.m. PDT Jul 30 were accidentally removed. We're sorry for the inconvenience.
Mac clone maker Psystar has hired a new legal firm--the same one defending Jammie Thomas-Rasset--for its courtroom battle against Apple's copyright infringement suit.
Psystar used its hiring of Houston-based Camara & Sibley, which is also defending convicted music-pirate Thomas-Rasset, to comment on the suit.
"Psystar has always been more a Cowboy than a Hippie. Now we've changed lawyers to better reflect who we are," the company said Tuesday in a post on its Web site. "Everyone here values openness. And that's how we're going to fight Apple: in public."
The company was previously using Carr & Ferrell of Palo Alto, Calif., though it's not clear whether the "Hippie" reference is to that law firm.
The posting goes on to explain Psystar's position in the lawsuit. Claiming that it is "probably one of Apple's biggest customers," Psystar said it buys legal copies of Mac OS X from retailers, just like anyone else. The only difference is that it also installs extensions, allowing Mac OS X to run on its computers.
"Apple's copyright on OS X doesn't give Apple the right to tell people what they can do with it after they buy a copy," Psystar said in the post. "Apple can't tell an applications developer that it can't make a piece of Mac-compatible software. And they can't tell us not to write kernel extensions that turn the computers we buy into Mac-compatible hardware."
Unfortunately for Psystar, that is exactly what Apple believes.
Apple contends that the Mac OS X End User License Agreement (PDF), which each user must agree to before installing the software, is all the proof it needs. The agreement clearly states that the operating system can only be installed on an Apple-labeled computer. That could leave any clone maker without a legal leg to stand on.
Psystar filed for bankruptcy in May, which normally could shield a company from its legal woes. But Apple asked the court to lift the automatic stay of proceedings in the copyright case.
Apple won its argument, and a new trial date has been set for January 11, 2010.
Gregory McKenna, of Florissant, Mo., is suing Apple because he says two of the company's iPods contained illegal receivers that allowed the Mafia to send him threatening messages, according to court documents obtained by CNET.
(Credit:
Apple)
Filed Wednesday in a St. Louis district court, the suit names as defendants the St. Louis Police Department, unknown agents of the FBI, Apple, a private investigator, and an auto mechanic.
The alleged motive for the threats was that the Mafia wanted McKenna to work as a fashion model for them at a New York modeling agency. McKenna said he called local police and the FBI field office, but allegedly nothing was done. This allegedly allowed the Mafia members to "stalk, threaten, attempt rape, and kidnap" him.
McKenna said that in 2005, he purchased an iPod Shuffle on eBay and discovered that when listening to the device the Mafia was able to send audio threats to the device. This was allegedly enabled through a receiver installed by Apple.
A second device, an iPod Mini, was also enabled to allow the Mafia to generate death threats, according to the lawsuit.
McKenna also said he hired a private investigator to search his home and car. He claims the investigator found listening devices in his bedroom, living room, upstairs bathroom, and his Toyota Camry. When asked to confirm his findings by police, the private investigator said he found nothing.
The lawsuit is claiming damages in the amount of $14.2 million.
