Things are Heat Up Between Apple and Nokia

Apple is one step closer to potentially taking a bite out of Nokia's U.S. market share. The U.S. International Trade Commission on Thursday said it will review the iPhone maker's complaint against the Finland-based mobile-phone giant. The ITC is also reviewing a similar complaint from Nokia against Apple.

The ITC is an independent federal agency that, among other things, reviews complaints against unfair trade practices involving patent, trademark and copyright infringement. It has the authority to order U.S. customs officials to block goods from entering the U.S. If Apple wins its bid, it would effectively block Nokia from bringing its handsets into the U.S.

"Obviously there is a lot of money to be made in mobility. Over time, if it turns out there are legitimate claims on anyone's part, usually there is some sort of licensing deal," said Michael Gartenberg, a vice president at Interpret. "This does show that companies like Apple will continue to be targets because you don't sue companies that don't have money."

Mobile Tit for Tat

Both Apple and Nokia are alleging patent infringement. Nokia took the first swing in October when it filed a complaint in U.S. District Court in Delaware accusing Apple of infringing on its patents for GSM, UMTS andwireless LAN (WLAN) standards. The patents cover wireless data, speech coding, security and encryption, and Nokia said they are infringed by all Apple iPhone models shipped since its introduction in 2007.

Apple sat quietly for about two months before launching a counterattack against Nokia in December. Apple's countersuit charged Nokia with infringing on 13 Apple patents. That led to an escalation, with Nokia proceeding to file its complaint with the ITC and Apple quickly following suit.

The ITC's Busy Agenda

The ITC has its hands full these days with mobile-market complaints. Beyond the Nokia-Apple brawl,Eastman Kodak filed a complaint with the ITC on Jan. 14, resulting in an investigation of both Apple andResearch In Motion.

The complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the U.S. and the sale of certain mobile telephones and wireless communication devices featuring digital cameras and components that allegedly infringe Kodak patents.

"By instituting this investigation, the ITC has not yet made any decision on the merits of the case," the ITC said. "The ITC's chief administrative law judge will assign the case to one of the ITC's six administrative law judges who will schedule and hold an evidentiary hearing."

Kodak's Licensing Push

Within 45 days, the ITC will set a target date for completing its investigation. Kodak also filed separate lawsuits against Apple and RIM. Kodak Chief Intellectual Property Officer Laura Quatela said the company has held discussions with Apple and RIM for years in efforts to resolve the issue amicably and did not reach a satisfactory agreement.

"Our primary interest is not to disrupt the availability of any product but to obtain fair compensation for the use of our technology," Quatela said. "There's a basic issue of fairness that needs to be addressed. Those devices use Kodak technology, and we are merely seeking compensation for the use of our technology in their products."

Kodak has a winning record, having licensed digital imaging technology to approximately 30 companies, including such leading mobile-device companies as LG Electronics, Motorola, Nokia, Samsung and Sony Ericsson. Most recently, an ITC judge ruled in favor of Kodak against Samsung for infringing on the camera maker's patents.