Ericsson turns patent royalty spat with Apple into an international incident
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.
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.
Comments
As has often been the case, Apple disagrees with Ericsson's interpretation of FRAND."
That's fine. That's why there are courts.
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?
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.
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.
"Desperado, why don't you come to your senses?" - Eagles 1973
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
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.
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?
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.
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."
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?
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?
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.