Ericsson sues Apple again as patent dispute intensifies

Ericsson (NASDAQ: ERIC) is escalating its legal battle with Apple (NASDAQ: AAPL) over patent royalties Ericsson believes Apple owes it for using its wireless technologies in the iPhone and iPad.

Ericsson said that it filed seven lawsuits against Apple in U.S. District Court for the Eastern District of Texas seeking damages and injunctions. Ericsson also made two complaints with the International Trade Commission seeking block Apple's product from the U.S. market. The Swedish network vendor said Apple is infringing on Ericsson's 2G and LTE patents. Ericsson said it took the action after Apple refused Ericsson's offer to have a court determine fair licensing terms by which both companies would be bound.

"By refusing Ericsson's fair and reasonable licensing offer for patented technology used in Apple smartphones and tablets, Apple harms the entire market and reduces the incentive to share innovation," Ericsson claims.

The lawsuits cover 41 Ericsson patents related to "many aspects of Apple's iPhones and iPads," including standard essential patents related to the 2G and LTE standards as well as other patents that are critical to features and functionality of Apple devices, such as the design of semiconductor components, user interface software, location services and applications, as well as Apple's iOS operating system. Ericsson seeks exclusion orders in the ITC proceedings and damages and injunctions in the District Court actions.

"We have offered them a license; they have turned it down," Kasim Alfalahi, Ericsson's chief intellectual property officer, told Bloomberg. "We're not a company that's planning to extract more than the value we put on the table."

In mid-January the two companies sued each other after failing to resolve the dispute through two years of negotiations over how much money Apple believes it should pay to Ericsson to license Ericsson's technology in its iPhones and iPads.

Apple argued that the royalties it pays to Ericsson should be based on the value of the chips inside its devices, not the value of the devices themselves. Ericsson, on the other hand, is arguing that Apple's royalty payments should be based on the "end prices of entire LTE devices." Ericsson said at the time it was taking the legal action in response to claims by Apple that the patents aren't "essential" for LTE.

Apple representatives did not immediately respond to a request for comment. However, a spokesman for Apple on Friday referred to the company's statement in January, according to the Wall Street Journal. "We've always been willing to pay a fair price to secure the rights to standards essential patents covering technology in our products. Unfortunately, we have not been able to agree with Ericsson on a fair rate for their patents so, as a last resort, we are asking the courts for help," Apple said in a statement on Jan. 14. Apple filed a lawsuit asking the U.S. District Court for the Northern District of California to find that it does not infringe a small subset of Ericsson's patents, a claim that Ericsson disputes.

Ericsson said that Apple's global license agreement for Ericsson's mobile technology expired last month, and Apple has declined to take a new license offered on fair, reasonable and non-discriminatory terms.

For more:
- see this release
- see this Bloomberg article
- see this WSJ article (sub. req.)

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