Ericsson turns patent royalty spat with Apple into an international incident

Posted:
in iPhone edited May 2015
Months after taking Apple to court in the U.S., Swedish telecom giant Ericsson has filed separate but related lawsuits in the UK, Germany, and the Netherlands accusing Apple of using Ericsson patents without a legitimate license.




Ericsson says that they have engaged Apple in licensing discussions for as long as two years, but were unable to reach an agreement on fair, reasonable and non-discriminatory (FRAND) terms. The previous licensing arrangement between the two firms expired in January.

"Apple continues to profit from Ericsson's technology without having a valid license in place," Ericsson intellectual property chief Kasim Alfalahi said in a release. "Our technology is used in many features and functionality of today's communication devices. We are confident the courts in Germany, the UK and the Netherlands will be able to help us resolve this matter in a fair manner."

Many of the patents involved in these suits are considered standards-essential, and Ericsson --?a century-old company that invented many modern telecom technologies --?is required to license them on FRAND terms. As has often been the case, Apple disagrees with Ericsson's interpretation of FRAND.

Apple sued Ericsson in January, alleging that the Swedish company was charging excessive royalty rates for intellectual property related to 4G LTE technology. Ericsson responded with a total of seven countersuits and filed two complaints with the International Trade Commission, seeking damages and sales injunctions.
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Comments

  • Reply 1 of 163
    quadra 610quadra 610 Posts: 6,757member
    "Ericsson says that they have engaged Apple in licensing discussions for as long as two years, but were unable to reach an agreement on fair, reasonable and non-discriminatory (FRAND) terms. The previous licensing arrangement between the two firms expired in January.

    As has often been the case, Apple disagrees with Ericsson's interpretation of FRAND."

    That's fine. That's why there are courts.
  • Reply 2 of 163
    bloggerblogbloggerblog Posts: 2,464member
    Oh boy, here we go again.
  • Reply 3 of 163
    thewhitefalconthewhitefalcon Posts: 4,453member
    As I recall, Ericsson's idea of "fair and reasonable" was utterly ridiculous.
  • Reply 4 of 163
    gatorguygatorguy Posts: 24,213member
    Not mentioned is that Ericsson offered to have an independent arbitrator determine the proper rates, but Apple reportedly refused to be bound by whatever the rate he/she decided was fair. To me that sounds like a reasonable offer and one that might have avoided lawsuits.
  • Reply 5 of 163
    gwydiongwydion Posts: 1,083member

    Cases involving Apple, Google, Microsoft, Samsung, Motorola had suits in USA, UK, Japan, France, Germany, Netherland, Australia, Korea. Were they "international incidents" or were the usual thing?

  • Reply 6 of 163
    tmaytmay Posts: 6,342member
    Quote:

    Originally Posted by Gatorguy View Post



    Not mentioned is that Ericsson offered to have an independent arbitrator determine the proper rates, but Apple reportedly refused to be bound by whatever the rate he/she decided was fair. To me that sounds like a reasonable offer and one that might have avoided lawsuits.

    No. It just sounds like your opinion of reasonable.

     

    Wanna bet that Ericsson would have wanted a "home field" advantage in the arbitration and rate setting?

     

    I say let Apple battle this out and set some precedents for a modern era of FRAND, not the stasis that benefits the old monolithic telecom industries.

     

    These are portable computers with wireless communication, not dumb phones. Rates should reflect that.

  • Reply 7 of 163
    analogjackanalogjack Posts: 1,073member

    On the face of it Apple looks like a bit of a dick in this case, as it would seem that it would be a simple matter of basing the fee on what everyone else is paying. How complicated can that be. However, I can only presume that there must be convoluted intricacies too subtle for the lay person to comprehend. Therefore it would be excellent if AppleInsider could follow this one up to the final judgement and publish the court's  full reasoning, so that Joe Public can see for him/herself if this sort of stuff really does come about because of intransigent differences between Ericsson and Apple or if Apple really is simply being a dick about this.

  • Reply 8 of 163
    ceek74ceek74 Posts: 324member

    "Desperado, why don't you come to your senses?" - Eagles 1973

  • Reply 9 of 163
    rob53rob53 Posts: 3,251member
    Quote:

    Originally Posted by AnalogJack View Post

     

    On the face of it Apple looks like a bit of a dick in this case, as it would seem that it would be a simple matter of basing the fee on what everyone else is paying. How complicated can that be. However, I can only presume that there must be convoluted intricacies too subtle for the lay person to comprehend. Therefore it would be excellent if AppleInsider could follow this one up to the final judgement and publish the court's  full reasoning, so that Joe Public can see for him/herself if this sort of stuff really does come about because of intransigent differences between Ericsson and Apple or if Apple really is simply being a dick about this.


    Read some of the lead-up articles and you'll get additional information but no actual numbers (generally these are considered confidential information).

     

    What this article fails to remind readers is that Ericsson initially filed in the best court in the world, the U.S. District Court for the Eastern District of Texas. /s 

  • Reply 10 of 163
    gatorguygatorguy Posts: 24,213member
    rob53 wrote: »
    Read some of the lead-up articles and you'll get additional information but no actual numbers (generally these are considered confidential information).

    What this article fails to remind readers is that Ericsson initially filed in the best court in the world, the U.S. District Court for the Eastern District of Texas. /s 
    i think Apple actually filed the first lawsuit didn't they?
  • Reply 11 of 163
    iqatedoiqatedo Posts: 1,824member
    Quote:
    Originally Posted by AnalogJack View Post

     

    On the face of it Apple looks like a bit of a dick in this case, as it would seem that it would be a simple matter of basing the fee on what everyone else is paying. How complicated can that be.

     


     

    So you are privy to negotiations then. Please spell out the terms that are holding up proceedings... or to put this another way, assure the reader at least that Ericsson's terms are fair and reasonable.

  • Reply 12 of 163
    palominepalomine Posts: 362member
    Here's a question I had yesterday: is there a point at which Apple gets overwhelmed with lawsuits?

    I swear, the world is full of companies, nations and people that would sooner sue than take care of their own business. As a strategy. If you got money they are gonna pound you for whatever they can get.

    That's the only worry I can come up with for Apple investors.

    How many simultaneous lawsuits can they take on?

    At what point does Apple have more lawyers walking the halls than top engineers? :\
  • Reply 13 of 163
    ecatsecats Posts: 272member

    Ericsson want up to a billion dollars per year. Think about that.

     

    We're talking about less than 50 patents. If Apple gave every patent holder such absurd royalties each phone would be hundreds of thousands of dollars. As technology developed each model would become insanely more expensive than the previous.

     

    There would be zero point in licensing patents and standards wouldn't exist. It'd be more economical to either buy the entire license holder or roll different, incompatible methods. (Analogous to cars that could only drive on certain roads.)

     

    It's no surprise the two haven't met an agreement, it's pretty clear that since the iPhone (and indeed the entire smartphone category) became popular, Ericsson suddenly got greedy and increased their asking price for what in the end amounts to a few basic methods of no contemporary novelty. (Some of the patents relate to the exceedingly dated "2G" wireless technology.)

     

    Heck the fact that east Texas is getting involved is already indication enough about what Ericsson are up to.

  • Reply 14 of 163
    tmaytmay Posts: 6,342member
    Quote:

    Originally Posted by Gatorguy View Post





    i think Apple actually filed the first lawsuit didn't they?

    Yep.

     

    Here's the Appleinsider link to the article:

     

    http://appleinsider.com/articles/15/01/14/apple-sues-ericsson-to-trim-wireless-patent-royalty-rates

     

    "In a complaint lodged with the U.S. District Court for the Northern District of California, Apple revealed that Ericsson is leaning on deemed standard essential IP to demand a percentage of the total price of every cellular-connected iPhone or iPad sold, reports Reuters.



    "Ericsson seeks to exploit its patents to take the value of these cutting-edge Apple innovations, which resulted from years of hard work by Apple engineers and designers and billions of dollars of Apple research and development — and which have nothing to do with Ericsson's patents," the complaint reads, as reported by Bloomberg.



    Apple contends royalties should be based on the value of the component using the patented tech, such as baseband chips or application processors, which would come out to a fraction of what Ericsson is asking."

  • Reply 15 of 163
    gatorguygatorguy Posts: 24,213member
    tmay wrote: »
    No. It just sounds like your opinion of reasonable.

    Wanna bet that Ericsson would have wanted a "home field" advantage in the arbitration and rate setting?
    I suppose that depends what is meant by independent arbitrator. There's no mention by Apple why they refused it and it would be assumed they would have had a say in who the arbitrator was. There was another instance a couple years ago of Apple giving notice they wouldn't be bound by a court's determination of what was FRAND/fair.
  • Reply 16 of 163
    tmaytmay Posts: 6,342member
    Quote:

    Originally Posted by Gatorguy View Post





    I suppose that depends what is meant by independent arbitrator. There's no mention by Apple why they refused it and it would be assumed they would have had a say in who the arbitrator was. There was another instance a couple years ago of Apple giving notice they wouldn't be bound by a court's determination of what was FRAND/fair.

    Ericsson filed in Eastern Texas.

     

    Apple filed in the Northern District of California.

     

    What is the District of Eastern Texas noted for?

  • Reply 17 of 163
    gwydiongwydion Posts: 1,083member
    Quote:

    Originally Posted by tmay View Post

     

    Ericsson filed in Eastern Texas.

     

    Apple filed in the Northern District of California.

     

    What is the District of Eastern Texas noted for?


    Did Ericsson asked the arbitration in the Eastern District of Texas?

  • Reply 18 of 163
    rob53rob53 Posts: 3,251member
    Quote:

    Originally Posted by tmay View Post

     

    Ericsson filed in Eastern Texas.

     

    Apple filed in the Northern District of California.

     

    What is the District of Eastern Texas noted for?


    http://appleinsider.com/articles/15/02/27/ericsson-unloads-legal-barrage-against-apple-in-ongoing-patent-dispute

     

    "Ericsson on Friday announced it filed seven lawsuits against Apple in the U.S. District Court for the Eastern District of Texas, as well as two ITC complaints, over 41 separate patents covering a variety of wireless standards and technology."

     

    Apple didn't start this one.

  • Reply 19 of 163
    gatorguygatorguy Posts: 24,213member
    tmay wrote: »
    Ericsson filed in Eastern Texas.

    Apple filed in the Northern District of California.

    What is the District of Eastern Texas noted for?
    Where else would you expect a company claiming patent infringement file? I suppose they could have gone to Delaware, another venue friendly to patent holders. Every company and their lawyers tries to find the friendliest court to file in. Common sense. In Apple's case that's the Northern District of California apparently unless that was their only option.
  • Reply 19 of 163
    SpamSandwichSpamSandwich Posts: 33,407member
    Time for Apple to release the Kraken! Leverage those massive overseas holdings to initiate a hostile takeover of Ericsson.
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