Amazon sues cloud partner Nokia for pilfering its cloud patentsAmazon sues cloud partner Nokia for pilfering its cloud patents

Nokia quit the cloud platform market last year and partnered with AWS in Germany, but that has not stopped Amazon from going after it.

Iain Morris, International Editor

July 31, 2024

5 Min Read
Nokia at the 2024 MWC Barcelona trade show
(Source: GSMA)

In Germany, AWS and Nokia look as well synchronized as an Olympic rowing team, jointly powering cloud core technologies for Telefónica, one of the country's biggest mobile operators. But thousands of miles from the event, one rower is beating the other with his oar. Claiming Nokia ripped off its cloud patents, the intellectual property that underpins the Telefónica service, AWS parent Amazon is seeking damages in a Delaware court.

The Internet giant's basic case seems to be that it invented the cloud way back in the early 2000s only to see Nokia pilfer its expertise about 15 years later with the 2020 launch of its "cloud and network services" business division. The full details can be read in this 186-page filing, but Amazon seems to have a special distaste for CloudBand Infrastructure Software (CBIS), a Nokia virtualization platform (more on this later), saying it "infringes Amazon patents related to configuring virtual machines and managing distributed application execution."

Rather unkindly, considering their German partnership, Amazon also implies that Nokia's alleged criminal pivot to the cloud was carried out in desperation after it was eclipsed by Apple and Samsung in the mobile phone market, where it previously generated most of its sales. "To save the company, Nokia exited the mobile device business in 2014 – an act its board chairman referred to as a 'moment of reinvention' – and pivoted to the sale of 5G network infrastructure and associated services that it acquired from Alcatel-Lucent in 2016," it said.

Describing the 2020 setup of cloud software and services, Amazon goes on to allege that "Nokia's 'new company strategy' involved leveraging Amazon's innovative solutions, including Amazon's patented technology, to address issues faced by cloud service providers." It is taking legal steps in response, it explains. "Amazon brings this suit against Nokia because it was Amazon that pioneered in the cloud, and now Nokia is using Amazon's patented cloud innovations without permission," reads the filing.

Nokia was guarded in its response while alluding to its own lawsuit against Amazon, which it accused of thieving "video-related technologies" back in October. "We respect other companies' intellectual property and expect others to do the same," said a spokesperson by email, after noting that Nokia has "one of the world's strongest patent portfolios of connectivity and video technologies." The statement continued: "We have just become aware of Amazon's claims of patent infringement in an action they have filed in the Delaware District Court. We will review these matters and defend ourselves vigorously in court."

Multivendor breeds contempt

This is a peculiar case for all sorts of reasons. The big one, though, relates to that German partnership. In the smartphone sector, a normal working day isn't complete without a spot of litigation between rival manufacturers. More broadly, there is always the potential for a lawsuit if partners in one field are competitors in another. But Nokia these days would probably claim not to be in cloud competition with Amazon or AWS at all. From the AWS perspective, Ericsson, Nokia's big 5G rival, would certainly seem like a more direct threat.

That's because Nokia has effectively abandoned work on CBIS and Nokia Container Services (NCS), another cloud infrastructure platform that Amazon grumbles about in its filing because it "provides functionalities similar to those offered earlier by Nokia CloudBand." Both were jettisoned in June last year when Nokia admitted it could no longer compete against the likes of AWS. It reaffirmed that message just a few weeks ago.

"With the amount of spend that is going into the Red Hats and the hyperscalers and the resources and people and talent, it was very, very clear to us that's not going to be an area we will be able to compete in," said Raghav Sahgal, the head of the seemingly notorious cloud and network services business group, in conversation with Light Reading at the Digital World Transformation event in June.

Under its new approach, Nokia has offloaded assets, including about 350 employees, to Red Hat, an IBM subsidiary, and professed cloud agnosticism. Rather than developing infrastructure platforms, it aims to focus on virtual and cloud network functions – the network applications themselves – and ensure these can synchronize with any third-party platform, whether Red Hat, AWS or someone else. The Telefónica contract is supposedly an example of this approach, with Nokia's core network functions sitting on an AWS platform.

While CBIS and NCS are still being maintained, the ultimate plan is to kill those platforms and migrate the customers on them to either OpenStack Platform or OpenShift, the equivalents from Red Hat, which Nokia now describes as its primary cloud partner. Under their arrangement, the CBIS and NCS expertise has effectively been transferred to IBM. Whether this embroils Big Blue in the AWS litigation is unclear.

In stark contrast to all this, Ericsson maintains its own cloud software and services unit, which still develops infrastructure platforms and has no intention of giving them up, it told Light Reading earlier this year. In Germany, it could hardly be a more direct competitor to AWS. The Telefónica cloud core provided by AWS and Nokia is relatively new and supporting only about 1 million of the operator's 45 million to 46 million customers. Most are served via an older cloud core that combines Ericsson's infrastructure platform with Ericsson's network functions.

A courtroom battle between Amazon and Nokia will conceivably make no difference and be of limited interest to the German telco. The departments responsible for intellectual property litigation within these companies sit apart from the people rolling out the technology. Yet it could raise questions about the commercial durability of "multivendor" arrangements, a current obsession for operators worried about relying too much on a single vendor. An AWS and Nokia clash over the very technologies they are supposed to be jointly supporting in Germany does not look good.

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About the Author

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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