Ericsson filed a lawsuit on Monday accusing Apple of engaging in unfair tactics to avoid paying royalties for the use of baseline 5G telecommunications technology.
Ericsson says it’s trying to renegotiate a licence with Apple and is already encountering obstacles. It wants a federal judge to rule that Ericsson’s offer complies with requirements that royalty demands be fair and reasonable.
The two companies have been here before — their earlier licence was signed in 2015 only after protracted litigation. Then, Ericsson said, Apple filed a “surprise suit” challenging the validity of seven Ericsson patents and demanding that Ericsson provide proof for every single patent it claimed was part of an industry standard.
“Despite receiving substantial revenues from its sales of iPhones and other cellular devices, Apple has historically resisted licensing overtures by Ericsson, and other essential patent holders, as part of a global strategy to devalue standard essential patents and reduce Apple’s royalty payments,” Ericsson said in the complaint, filed in federal court in Marshall, Texas.
The dispute is over how much Apple should pay Ericsson for 5G connectivity and networking technology developed by the European Telecommunications Standards Institute.
Companies that collaborate to ensure devices are interoperable gain the advantage of ensuring that their inventions are included in any industry standard. As a result, they pledge to license any relevant patents on “fair reasonable and non-discriminatory”, or Frand, terms, a phrase that’s never been clearly defined and has led to lawsuits and regulatory investigations worldwide.
High-stakes litigation
Apple, which reported US$232-billion in revenue and $74-billion in net profit in the nine months ended 26 June, has a history of high-stakes litigation as part of licensing negotiations, particularly with companies like Ericsson, Nokia and Qualcomm, which own vast swaths of patents on foundational cellular technology.
Ericsson said it’s publicly announced its royalty rates for 5G technology to handset makers, but Apple has argued that the rate doesn’t meet Ericsson’s obligations.
“Apple’s allegations of breach threaten Ericsson’s reputation and business,” the Stockholm-based networking company said in the complaint
Officials at Apple didn’t immediately respond to queries seeking comment. — (c) 2021 Bloomberg LP