7 May 2013 | By Katy Dowell
Leading a tiny team at the raging heart of the great 21st century patent war is… tremendous fun, says Nokia litigation boss Richard Vary
When Richard Vary arrived at Nokia in 2006 from Linklaters the company was the world’s largest manufacturer of mobile phones, selling more than 500 million worldwide. Apple, meanwhile, was but a fruit and the concept of the iPhone was just that - a concept.
Today, Nokia’s sales have plummeted to a 13-year low, with mobile phone volumes down by 25 per cent in the first quarter of 2013 alone. And Apple is no longer a fruit but a technology that has revolutionised electronic communications.
This is a market that is constantly moving and one where the fight for IP rights is alive and roaring. As worldwide litigation head, Vary is sitting right in the middle of the storm.
Vary was joined Nokia in 2006 to work alonsgide Ari Laakkonen, who he had worked with at Linklaters. Laakkonen had been working with a third lawyer who was about to go on maternity leave and he needed some help.
Just five days after his arrival, Qualcomm, which had previously sued the company in the US, launched a series of actions against Nokia around the globe. It was the start of what became known as the patent wars.
Of course, such battles are nothing new. In fact, Vary is quick to point out that one of the early skirmishes involved the Wright brothers, who sought to prevent rivals from manufacturing aeroplanes through litigation.
But the technological age has been dogged by litigation, and this has drawn in some of the market’s biggest players. Nokia, Apple, Sony, Samsung and Ericsson have all been involved in major battles in recent years.
“The first big patent case we did against Apple was in 2008,” says Vary. “It walked into the market and just launched this phone [without paying patent licenses to anyone].” Nokia alleged Apple had used its technology to develop the phone. Since then the two have hardly been out of court, litigating against each other, or other tech giants.
“It’s not just about bringing in the money but also levelling the playing field, so if you buy Apple you know the research came from Nokia,” Vary insists.
It has proven to be a lucrative market for experienced IP lawyers, although Nokia has learned much about how it instructs external counsel from bruising court experience. Vary found himself heavily reliant on external counsel after Laakkonen left to join Powell Gilbert and his third colleague took her family home to Australia.
Vary says that when Qualcomm launched its claims in 2008 the dispute was enormous, valued at more than $1.3bn. There were several patent portfolios to be litigated over: six in the US; two apiece in the UK, France, Germany, Italy; and three in China.
Just five years on, Nokia has cut this spend dramatically, with patent cases now litigated for less than €1m and firms offering deals to get a slice of the action. Today, Nokia has no formal panel of advisers, but it does regularly go to the same firms for advice. Bird & Bird is among the go-to firms in the UK, US and Germany and, says Vary, it is picking up the odd instruction for the company in China too. “There are so few firms working in this area,” he says, adding that the advisers he instructs usually end up knowing more about the company than he does.
From his own team he demands strong procurement knowledge.
“The primary role of in-house lawyers is to be expert legal buyers,” he explains. “I like to recruit people from private practice - they know the legal market.”
Litigators, he says, tend to have a better feel for their counterparts in private practice, so when it comes to cutting deals they are better at negotiating.
As part of his cost-efficiency drive Vary has come to an understanding with his external advisers - if they want the work they have got to negotiate on rates. Bird & Bird, for example, was instructed for Nokia on its six-year battle with IP firm IPCom. Vary says the firm agreed to do elements of the case on a fixed fee deal and benefitted by being able to forecast costs for the next quarter and bill accordingly - and get paid on time.
With so much on the agenda you might expect Nokia to have a sprawling litigation team, but the truth is that it is compact. The company has a team of nine working on disputes globally - the largest grouping of four sits in a team in the US.
“It’s almost easier with a small team,” Vary says, clearly unfazed about what this means for the workload. “The difficulty is knowing about the case you’re all talking about.”
It is a fair point. Each IP portfolio that spawns a patent battle is named by its portfolio number and there can be several cases on different points with the same litigant names going on around the globe. Keeping track of them is no mean feat.
For Vary it has been a challenging time. Since his arrival at the company more than 200 patents have been litigated against Nokia in Europe, Asia and the US, with more than 80 reaching trial. Only one patent has been found to be valid and infringed by Nokia, although that decision was subsequently revoked by the European Patent Office.
Aside from patent litigation, Vary’s team is managing more than 200 pieces of litigation around the world, covering everything from major multi-jurisdiction cases to personal injury claims.
Not content with this heavy workload, Vary also sits as a deputy district judge and is working with the Patent County Court, helping it to manage a fast-track for small claims. This is presently for claims under £5,000, but that will increase to £25,000.
Back in the office, the patent wars are still raging. The biggest challenge for Nokia, like many of its contemporaries, is dealing with technologies coming out of emerging markets.
“The challenge is to get them to pay royalties,” he says. But it is a challenge he relishes.
“I can’t think of any other place where I could have as much fun,” he concludes.
At the heart of the mega-patent wars of the 21st century, Vary is one of a small group of lawyers who could forever determine how the world communicates.
Richard Vary, Nokia
Position: Global head of litigation
Annual legal spend: More than £10m (estimated)
Number of employees: 50,000
Legal capability: 250
External law firms: Bird & Bird, Powell Gilbert, Alston & Bird, King & Spalding, Clyde & Co, Reimann Osterrieth Kohler Haft
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