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Hi all,

Yesterday, Apple released its annual performance report (the 10-K form) as required by the SEC, and the hundred and four page document isn't exactly light reading. But, buried in all of the "material adverse impacts" from economy to earthquakes, there are a few gems--mostly in the ongoing legal battle section! Nothing says throwback like a good gloves off battle, and judging by Apple's language, that's exactly what Nokia will be getting.

The Filing
Nokia actually filed their lawsuit last week, but Apple waited to address it, either because they find it ridiculous or they're trying to find a quick way out; all they said in the 10-K is "The Company’s response to the complaint is not yet due." Nice. Nokia's press release regarding the suit quoted their VP of Legal and Intellectual Property Ilkka Rahnasto thusly:

"The basic principle in the mobile industry is that those companies who contribute in technology development to establish standards create intellectual property, which others then need to compensate for...by refusing to agree appropriate terms for Nokia's intellectual property, Apple is attempting to get a free ride on the back of Nokia's innovation."

We mostly like that for the free ride jab and the lack of conjunctions.

Ten patents are in question, dealing with wireless functionality, data, security and encryption as well as coding, and online analysts estimate damages upwards of one billion dollars, or an extra twelve bucks on every iPhone sold from that point forward. But the iPhone has been around since 2007--why now, Nokia?

Sales down, New Products in the Pipe
The long and short of this lawsuit could be very simple...Nokia posted some ugly numbers for the quarter and might just be looking to pick up some extra cash. They're losing market share in smartphones (down to thirty five percent), posted their first loss this decade and experienced a twenty percent decline in sales of devices and services. To add to the pain and suffering, the Finnish company's stock tumbled eleven percent after the findings were released.

But maybe, just maybe, this lawsuit is a preemptive strike. If you'll remember this summer Nokia introduced a concept so similar to Apple's iPhone it prompted the Executive VP to say, "If there is something good in the world then we copy with pride." Due out this coming year, is the current lawsuit a very noisy, very expensive bargaining chip? Nokia could be looking for an out of court conversation where both companies exchange the technology the other is infringing on like a hostage situation. Or prisoner exchange.

We're going to bet, however, that Nokia doesn't know what they're getting themselves into. Apple fights legal battles viciously, because of pride and a desire to protect what they see as theirs. The tagline of the 10-K summary of the Nokia battle, oft-quoted, showcases this perfectly: "The Company intends to defend the case vigorously."

For the full 10-K form, click here. (Nokia appears on page 30.) WIll Nokia take this one? Tell us what you think you-know-where!

Till tomorrow, Newsies...