Before the Christmas weekend, Apple and Nokia went back to legal war against each other, more than five years after a settlement. I agree with Apple that Nokia's industrial-scale privateering is highly abusive, and I wish Apple luck for both its antitrust suit against Nokia and its defense against Nokia's patents. I followed Nokia's last scattershot litigation (against HTC, from 2012 to 2014) and I saw countless Nokia patent assertions fail, mostly in Germany but also in the most difficult U.S. patent litigation venue, the International Trade Commission. I would really be surprised if the patents Nokia is presently asserting against Apple were, on average, better than what they used against HTC. Based on this assumption, I believe Apple can handle this and Nokia will probably end up with a result below (or even far below) its initial expectations.
In my previous post, I already wrote that Nokia's "all-out war and global carpetbombing" would "probably not sit well with Cupertino." When I wrote that, I had no idea that the next Apple-Nokia news was going to be that Apple removed Withings' iOS-compatible eHealth devices from its store. Seven months ago, Nokia completed its acquisition (PDF) of Withings, a French digital health company founded in 2008, for approximately $190 million.
I haven't found an official Apple statement, but it would be quite a coincidence if the delisting of those products had nothing to do with the patent dispute. A coincidence is made even less likely by the fact that this happened during the iTunes Connect Holiday Shutdown (December 23-27), a period when no new app reviews take place, which shows it's the part of the year when Apple doesn't usually want to change its catalog.
When I go to the Apple website and search for certain Withings products, I get the same message as the one reported in the media, basically saying the products are no longer available but they have a list of alternatives. I managed to download Withings' Health Mate app to my iPhone 7 Plus over here in Germany. I opened it once, just to check, and then I deleted it immediately because I don't want to support patent abusers in any way (unless they have products to which I can't find a viable alternative, which is not the case here).
A reader just told me that one can presently download five Withings apps from the U.S. App Store. It appears that Apple just removed Withings' physical products (which it also used to distribute in its stores).
I'm an iOS app developer myself (my first product will be launched soon) and I've checked the terms of Apple's developer agreement for anything that might trigger the removal of Withings' stuff form the App Store. The developer agreement doesn't allow reverse engineering of certain materials, and if Nokia brings infringement assertions against them, there is a possibility that some reverse engineering occurred. Also, Apple has reserved the broadest possible discretion for its decision to unilaterally terminate the agreement.
Nokia's litigation tactics and privateering ways are, without a doubt, vexatious. So I couldn't disagree with Apple if it made the case that it's just not reasonably acceptable for Apple to have to do "business as usual" with a Nokia subsidiary under the present circumstances.
However, if Apple ever went beyond removing Withings' physical products and also delisted its apps, I doubt that the leverage Apple might get from this would be worth the cost. The problem is that app developers like me need to rely on Apple giving all of us fair access to its customer base. Yes, Apple has the right and it always should have the right to reject or delist apps under certain circumstances. Case in point, I have expressed support here for Apple with a view to its disagreement with Spotify. But Apple should always remember: with great power comes great responsibility.
As app developers, we make enormous investments of money, energy, creativity, and time. For example, I started my project almost three years ago and made the first four hirings in 2014. When you make all of this effort and investment, you want to have certainty that Apple will give your products a fair review and won't just shut you down arbitrarily. I'm not saying that a removal of any Withings apps would be arbitrary; it could be an exceptional case and app developers like me usually don't have to worry about this. Also, should Nokia have violated the clause that prohibits reverse engineering, then I'll agree with Apple, but we just don't know. What I do know is that Apple reserves termination in its sole discretion, which is fine as long as we can all rely on Apple not abusing that discretion. A silent removal of apps would be bad because it would be intransparent. Apple should at least provide an explanation that makes all other app developers comfortable in case it delists any Nokia apps.
Apple is normally very rational. The removal of Withings' physical products from its store is one thing, but delisting Withings' apps would appear emotional if it happened.
Nokia spent much less on its Withings deal than it almost certainly expects to collect from Apple every year in the form of patent royalties every year. This here is not going to make Nokia back down. It will show to Nokia's senior leadership that a pissing contest with Apple is a bad idea, but it doesn't solve the fundamental problem that Nokia doesn't have much of a product business that Apple can attack. Maybe Apple holds some patents (such as the ones it acquired from Nortel) that it can use against Nokia's wireless infrastructure business (the former Nokia Siemens Networks business), unless past license agreements between Nortel and Nokia make that impossible. Maybe there are some new patents Apple could acquire somewhere to countersue Nokia. But there won't be nearly as much of an opportunity for countersuits (if any) as in 2009-2011, when Nokia was still a handset maker.
If Apple really wants to flex its muscles to demonstrate to Nokia that excessive aggression backfires, it should use law firms and strawman litigation firms such as Skepsis Telecom to launch invalidation strikes against many--and by "many" I don't mean 10, 20 or 30, but more like 150, 200 or 300--Nokia patents in different jurisdictions. Apple can afford the prior-art search for this. It can afford all those petitions for reexamination or revocation and the German nullity lawsuits. That would really teach Nokia and any other aggressor of that kind a lesson, and it would devalue their portfolios and make their investors nervous.
Nokia itself and its closest ally in that context, HTC, started about 100 proceedings against different IPCom patents in different jurisdictions, including Italy, where all they wanted was to slow-roll proceedings in other jurisdictions (called the "Italian torpedo"). It hoped that IPcom would run out of cash, but IPCom had received enough money from investors and from other licensees that it was able to handle all of this. And IPCom's founder could handle it, too: it was certainly an annoyance but also generated additional fee income for his own law firm. For Nokia, this would be a different situation. It's publicly-traded, meaning that investors may sell shares on any bad news from the litigation front. And to the best of my knowledge, its management doesn't own the law firms that represent it.
The only risk is that some Nokia patents might emerge stronger if they were reaffirmed by courts and patent offices. But that's where Apple can use its judgment and really focus on those 150 or 200 patents against which it can field extremely strong prior art.
Make Nokia bleed patents!
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