Google Inc, its YouTube video service, and Yahoo Inc on Thursday filed counterclaims against Xerox Corp in a lawsuit accusing them of infringing the document management company’s patents on Internet searches.

In filings in Delaware federal court on Thursday, the defendants sought declarations that they did not infringe the two patents at issue, or variantly that the patents are invalid and thus cannot be enforced by Xerox.

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Finding a winner in the battle between Nokia, the world’s largest cellphone maker, and iPhone maker Apple 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.

Nokia launched a new patent broadside against Apple on Tuesday, escalating a battle for control of the smartphone market that has already led to a flurry of lawsuits.

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.

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.

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 occurred in previous patent battles as each player tries to improve its negotiating position.”

ATTACKING PATENTS

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 as part of the major global legal fight which lasted from 2005 to 2008, and also of InterDigital 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.

OTHER VENUES — U.S. ITC, EUROPE

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.

Nokia’s three major legal fights

Since Motorola Inc launched a patent attack on Nokia in 1989, the Finnish firm has built one of the mobile industry’s widest patent portfolios. Only Ericsson and Qualcomm Inc have comparable portfolios.

The following are key facts about three major legal battles in Nokia’s history:

MOTOROLA VS NOKIA

In the 1980s Nokia rose to became one of the world’s top cellphone manufacturers, surprising established players.

Industry reaction: one April morning in 1989 a large box with more than 16 kilograms of documents, charging the firm with infringing nine Motorola patents, landed in the lobby of Nokia’s Salo plant in southern Finland.

“In April 1989 Motorola declared a war on Nokia, and I had to receive the declaration,” Anne-Liisa Palmu-Joronen, a lawyer at Nokia’s phone unit at the time, wrote in her memoirs.

Motorola took Nokia to the International Trade Commission and a court in Chicago and Nokia agreed in November to pay more than $10 million to settle the case.

Palmu-Joronen says Nokia learned from the 1989 Motorola case the role of immaterial rights in the battle for market share.

“The immaterial and invisible part of the battle on the global market would in the future be a significant part of the competiveness for the company like Nokia,” she writes.

QUALCOMM VS NOKIA

In mid-2008 Nokia and Qualcomm settled a 3-year, three-continent legal battle over patent licenses and royalties for 15 years. The battle alone cost the companies tens of millions of dollars in legal fees and worried investors on both sides of the Atlantic.

In April 1992, the two firms had signed a licensing agreement, giving Nokia access to Qualcomm’s CDMA patents. Over 15 years, Nokia says it paid $1 billion for Qualcomm’s “early patents,” giving it a fully-paid, royalty-free license to those.

But when the smoke cleared, Nokia still agreed to a hefty one-time payment of 1.7 billion euros, a deal that also opened the door for Nokia to use Qualcomm chips in its phones.

NOKIA VS APPLE

A legal battle between Apple and Nokia over patent infringement is likely to last for more than a year, said Bill Merritt, the head of mobile licensing firm InterDigital.

Nokia filed a suit in the United States in October, saying Apple had infringed 10 patents in technologies including wireless data transfer, a key factor in the success of iPhone. The suit accused Apple of trying to hitch a “free ride” on Nokia’s technology investment.

Apple, which entered the industry in mid-2007, overtook Nokia last quarter as the cellphone maker generating the highest total operating profit.

Apple filed a countersuit on December 11 claiming that Nokia is infringing 13 Apple patents.

“Other companies must compete with us by inventing their own technologies, not just by stealing ours,” Bruce Sewell, Apple’s General Counsel, said in a statement.

On Tuesday, Nokia said it had filed a complaint with the U.S. International Trade Commission (ITC) alleging that Apple infringes Nokia patents in “virtually all of its mobile phones, portable music players, and computers” sold.

The inclusion of the U.S. firm’s iconic iPod and iMac products in the complaint marked an escalation from the previous patent claims.

Source Reuters

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HELSINKI/SAN FRANCISCO (Reuters) – Top global cellphone maker Nokia Oyj on Thursday charged Apple Inc with infringing Nokia patents, accusing the iPhone maker of trying to hitch a “free-ride” on Nokia’s technology investments.
Nokia dominates the global handset market but it has lost some ground to new smartphone entrants like Apple, which entered the market with its iPhone in mid-2007.
The 10 patents in the lawsuit, filed in the U.S. state of Delaware, relate to technologies fundamental to devices using GSM, UMTS and/or wireless local area network (LAN) standards, Nokia said.
In its complaint filed with the U.S. District Court for the District of Delaware, Nokia said it was seeking compensation for Apple’s use of the patents and a declaration that Nokia is entitled to an injunction until Apple pays compensation, along with interest, for past infringement.
It did not specify an amount.
“Apple’s wireless communication devices take advantage of the decades of continued investments by Nokia to build today’s communication protocols,” Nokia said in the filing. “By refusing to compensate Nokia for its patented technologies, Apple is attempting to get a ‘free-ride’ on the billions of dollars that Nokia has invested.”
Apple declined to comment on the lawsuit.
Analysts said the suit could have an impact on the iPhone maker, who is likely one of the biggest net payers of royalties in the industry. As a latecomer, Apple has limited intellectual property assets compared with rivals, when all vendors work under cross-licensing agreements.
“It’s quite likely Nokia has a case,” said Tero Kuittinen, an analyst with MKM Partners. “Plenty of companies come to handset manufacturing and don’t pay for all the IP in early years. Several Asian vendors started paying GSM license fees years after they began manufacturing GSM phones.”

PATENT FIGHT
The patents cover wireless data, speech coding, security and encryption and are infringed upon by all iPhone models shipped since the iPhone was introduced in 2007, Nokia said.
About 40 companies have entered into license agreements with Nokia, including virtually all the leading handset vendors, but it has not struck a deal with Apple.
In its court filing, Nokia said it made various offers to Apple for a license agreement, which Apple rejected.
“This is about competition against Apple,” said Alfred Zaher, partner and intellectual property attorney at Blank Rome LLP in Pennsylvania. He added that if Apple settles the lawsuit, it may represent tens of millions of dollars, at most, over a 10-year period.
However, he said Nokia is facing an eroding market position that could represent billions of dollars.
“I don’t think Apple is as concerned about the patent infringement lawsuit from a global perspective as would be Nokia, looking at its market share and what it’s losing,” Zaher said.
Even if Apple were to pay past due royalties, “it would still enjoy a market share it otherwise would not have but for a period of ‘free-riding,’” the complaint said.
Nokia said that because it was difficult to predict whether it can regain market share lost to Apple, “Nokia’s harm cannot be compensated by payment of” past due royalties alone.
Legal battles over as many as 10 technology patents can easily take several years.
“Nokia’s enormous patent portfolio doesn’t make this a big surprise but it could have severe repercussions for Apple and its component supplier,” said CCS Insight analyst Geoff Blaber.
“Once again intellectual property has become the secondary battleground in a highly competitive mobile phone market.”
Last year, Nokia ended a more than three-year legal battle with U.S. chipmaker Qualcomm which spanned three continents and involved more than a dozen separate cases.
Apple shares closed up 0.1 percent at $205.20 on the Nasdaq. Nokia shares closed in Helsinki 0.3 percent lower at 8.82 euros.

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