Apple Hit With $2 Billion Patent Infringement Lawsuit

Apple Inc. is facing a claim for about $2 billion in damages from a German patent-holding firm that alleges the U.S. technology giant infringed on a cellphone technology it owns, a German court said Wednesday.

IPCom GmbH accuses Apple of improperly using patented technology that gives emergency calls priority on mobile networks.

A spokesman for IPCom, which is backed by U.S. fund manager Fortress Investments Group LLC, said the company’s demand for more than €1.57 billion ($2.12 billion) covers only Apple’s alleged infringement relating to devices sold in Germany. He declined to comment on whether IPCom would file similar suits in other countries.

An Apple spokesman declined to comment.

The lawsuit, filed in a regional court in Mannheim, is the latest volley in the global fight over smartphone patents. Apple, Samsung Electronics Co., Motorola Mobility and others have launched multiple suits in several countries in recent years claiming licensing fees from rivals or seeking to hamper competitors.

IPCom’s lawsuit comes after the European Patent Office last month rejected requests from Apple, Nokia Corp., HTC Corp. , Vodafone Group PLC and Ericsson to declare the patent invalid. IPCom said it is suing other companies for alleged infringement of the patent beside Apple, including Nokia.

Nokia didn’t respond to requests for comment.

Companies like IPCom, which critics derisively call patent trolls, make money by buying patents and then claiming royalties on them. IPCom bought the patent in question in 2007 from Robert Bosch GmbH, a German automotive-parts company that was a pioneer in car phones but left the business at the dawn of hand-held devices.

The Bavarian company owns nearly 1,200 mobile-communications patents developed by Bosch and Japan’s Hitachi Ltd. Spokesman Alistair Hammond said IPCom has licensing agreements with several smartphone makers but declined to identify them. German phone carrier Deutsche Telekom AG paid IPCom a three-digit-million-euro sum last year as part of such an agreement, he said. Mr. Hammond said the patent that IPCom is asserting against Apple is its most important patent.

Critics say patent-holding companies like IPCom hamper product-development efforts with frivolous lawsuits. Some inventors, however, say the companies promote innovation by paying for patents.

IPCom executive Bernhard Frohwitter, a former patent attorney for Bosch, founded the company in 2007. Fortress Investments owns about half of IPCom, with Mr. Frohwitter and his co-executive Christoph A. Schoeller holding the rest.

Friedrich Geiger

Source: online.wsj.com