SCENARIOS-Ways ahead in Nokia vs Apple legal battle

* Nokia charged Apple on Oct. 22 in Delaware, U.S.

* Apple’s answer, counter-claim expected

* Apple could go to U.S. International Trade Commission

* Legal battle could spill over to Europe

By Tarmo Virki, European technology correspondent

HELSINKI, Nov 6 (Reuters) - Finding a winner in the battle between Nokia NOK1V.HE, the world's largest cellphone maker, and iPhone maker Apple AAPL.O could take years unless they agree on a licensing deal outside the courtroom.

Nokia dominates the global handset industry but has lost ground in the high-end of the market to new players like Apple which entered the market with its iPhone in mid-2007.

On Oct 22, Nokia accused U.S.-based Apple of hitching a “free-ride” on the Finnish company’s technology investments.

Following are the main scenarios of the legal battle starting to unfold: CASE IN DELAWARE

Nokia filed its suit in the District Court of Delaware, United States, saying Apple had infringed 10 patents in technologies like wireless data transfer, a key factor in the success of iPhone. [ID:nLM664007]

The patents also cover speech coding, security and encryption, and are infringed by all iPhone models shipped since the iPhone was introduced in 2007, Nokia said.

The case is expected to last 2-3 years, and analyst estimates for compensation Nokia is seeking range from $200 million to $1 billion. [ID:nLN464459]

Apple is expected by analysts and lawyers to countersue, in which case the two suits could be merged.

“I would not be surprised to see a counter-claim from Apple citing patents it owns that it believes Nokia is infringing,” said Ben Wood, research director at CCS Insight. “This type of tit-for-tat approach has occured in previous patent battles as each player tries to improve its negotiating position.”


The Delaware case could be stayed for re-examination of patents or if one of the companies takes the case to the U.S. International Trade Commission (ITC).

It is unlikely someone could make a mobile phone without using technologies Nokia has patented, but lawyers said that would not prevent Apple questioning the patents.

Nokia has successfully attacked patents of Qualcomm QCOM.O as part of the major global legal fight which lasted from 2005 to 2008, and also of InterDigital IDCC.O earlier this year.

“There are so many ways to attack a patent,” patent lawyer Alton Hornsby from law firm Merchant & Gould said.

A patent’s novelty and non-obviousness are often questioned.

Apple could ask patent office to invalidate the patents or to review them in the U.S. Patent Office, where interparty re-examination could take 6-7 years.

“It would definitely cause a ripple in the industry if Apple were to invalidate those patents. Where would it put all the other companies?” Hornsby said.

Nokia has cross-licensing deals with 40 companies, including all top cellphone makers but Apple.


If the case drags on, Apple or Nokia could take it to European countries, as happened in the Nokia-Qualcomm battle.

In the United States, the ITC is an increasingly popular venue for patent lawsuits because it can bar imports of products made with infringing technology. The Delaware case could be stayed until an ITC decision.

“The chance of Nokia, or Apple, letting this issue go to the ITC is less than 50 percent,” said Steven Nathasingh, managing director of U.S. research firm Vaxa Inc.

“In cases where ownership rights are clear, a settlement is more likely since each side gives up some control to the court over the outcome and it saves time and money. Neither company can afford to be distracted right now given new entrants into the wireless handset market,” he said.

iDeal? Analysts said the best solution for both companies would be settling the case with a mutually acceptable payment level.

“Nokia wants to be careful it doesn’t kill the goose with the golden egg while Apple does not want to tarnish its premium brand by being continuously sued by other companies for using their technologies without payment,” Nathasingh said.

“They both have something to gain if they can put their heads together for a win-win,” he said.