Ericsson sues Apple in Europe as patent dispute drags on

Ericsson (NASDAQ: ERIC) is suing Apple (NASDAQ: AAPL) in Germany, the UK and the Netherlands, arguing Apple owes it patent royalties for using Ericsson's wireless technologies in the iPhone and iPad. The move represents an expansion of the companies' existing legal squabble.

Ericsson said the lawsuits cover patent royalties for 2G and LTE standards, as well as other technology that is not standardized but is related to things like the design of semiconductor components and non-cellular wireless communications.

If Ericsson wins the cases, Apple would be required to pay the Swedish vendor between $240 and $725 million (SEK 2-6 billion) annually, analysts said, according to Reuters, based on estimated levels of handset sales and royalty payments per phone.

"Apple continues to profit from Ericsson's technology without having a valid license in place," Kasim Alfalahi, Ericsson's chief intellectual property officer, said in a statement. "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."

An Apple spokeswoman declined to comment on the new legal action, according to Reuters, but referred to its statement in January. "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," part of that statement said.

Ericsson CEO Hans Vestberg said in late April that the company's goal is "to settle outside court as soon as possible."

In February, Ericsson filed seven lawsuits against Apple in the U.S. District Court for the Eastern District of Texas, seeking damages and injunctions. Ericsson also made two complaints with the U.S. International Trade Commission seeking block Apple's products from the U.S. market.

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.

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.

For more:
- see this release
- see this Reuters article
- see this Bloomberg article

Related Articles:
Ericsson sues Apple again as patent dispute intensifies
Apple, Ericsson come to blows over 'reasonable' patent licensing terms
Google settles patent litigation with Apple-backed Rockstar consortium
Samsung, Apple agree to drop patent litigation outside of U.S.