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Nokia Corp. sure knows how to get under Apple Inc.’s skin.
After settling a series of patent disputes and entering into a cross-license agreement in 2011, Nokia allegedly outsourced some patents not covered by the deal to other companies. Nokia chose two of Apple’s favorite nonpracticing entities—Acacia Research Corp. and Conversant Intellectual Property Management Inc.—to do Nokia’s dirty work, Apple contends in a breach of contract, unfair competition and antitrust complaint filed in U.S. District Court in San Jose Tuesday.
Those NPEs are now harassing Apple with “exorbitant” royalty claims in an anti-competitive scheme Apple calls “diffuse and abuse.” Acacia subsidiaries have sued Apple 12 times asserting Nokia patents, according to Cupertino, Calif.-based Apple. That brings the total number of times Acacia subsidiaries have sued Apple to 40, according to the complaint signed by Wilmer Cutler Pickering Hale and Dorr partner Mark Selwyn. Conversant and its subsidiaries have sued Apple at least two-dozen times, the complaint states.
“Acacia and Conversant can obtain more royalties from product companies than Nokia could have obtained through direct and transparent licensing, and then share with Nokia the ill-gotten fruits of their illegal exploitation,” writes Selwyn, who is joined on the brief by Wilmer partner William Lee.
In many instances, Apple claims, Acacia and Conversant are using the arrangement to avoid Nokia’s commitment to license the patents on fair, reasonable and nondiscriminatory (FRAND) terms. Apple v. Acacia Research Corp. doesn’t actually name Nokia as a defendant—just Acacia, Conversant and a few of their subsidiaries.
One of Nokia’s outsourced suits recently drew blood. Conversant subsidiary Core Wireless S.a.r.l. won a $7.3 million jury award against Apple last week in federal court using Nokia patents.
Tuesday’s lawsuit is the latest escalation in a patent war between the erstwhile smartphone competitors. Espoo, Finland-based Nokia has sued Apple in Germany and Texas, saying the company is refusing to extend the 2011 deal on licenses that are expiring.
For its part, Apple says Nokia launched “secret plans to monetize” patents reserved from their original deal, “including through abusive assertions against Apple.”
“The driving force behind Nokia’s strategy was to diffuse its patent portfolio and place it in the hands of” NPEs, Selwyn writes. “Acacia and Conversant were its chief conspirators.”
Contact Scott Graham at [email protected]. On Twitter: @scottkgraham
