Samsung countersues Ericsson in patent battle

Samsung Electronics has filed a patent-infringement lawsuit against Ericsson (NASDAQ:ERIC) a little less than four months after Ericsson sued Samsung for the same thing. Ericsson sued Samsung in November after the two companies reached an impasse over how much Samsung would pay Ericsson to license Ericsson's wireless standards patents.

Samsung is alleging that Ericsson infringed on 20 of its patents, including those related to wireless standards and device functions, according to Samsung's suit. Samsung's lawsuit, which was filed in U.S. District Court for the Eastern District of Texas, urges that Ericsson's suit be thrown out because its claims are invalid. Ericsson's suit was filed in the same court.

The two lawsuits are odd since Ericsson and Samsung are not considered big competitors. Ericsson is the world's largest network equipment vendor and Samsung is the world's biggest handset maker. Samsung does build and sell network equipment but it not considered to be among the top five infrastructure vendors worldwide and the vast majority of its mobile sales come from phones and tablets, not network gear. "Samsung and Ericsson are not big competitors in any field right now," Sanford C. Bernstein analyst Mark Newman told the Wall Street Journal.

Samsung previously licensed Ericsson's patents in 2001 and renewed the licenses in 2007, but its license has now expired. Ericsson said Samsung refused to renew its license to Ericsson's patent portfolio on the same FRAND terms that its competitors have previously accepted. FRAND is shorthand for Fair, Reasonable and Non-Discriminatory terms. Ericsson said reducing fees for Samsung would give Samsung an unfair advantage over other companies that have licensed Ericsson's patents. At the time, Samsung said it disagreed with that characterization of the negotiations.

Samsung's lawsuit, which was field on March 18, said it is "a willing licensee," but that "Ericsson demands unreasonable terms and conditions…Ericsson no doubt has plans to extract unreasonable fees from the rest of the industry unless stopped by Samsung here."

"We anticipate that the court will resolve the claims in our favor and we hope that this will lead to a cross-license agreement on fair, reasonable and non-discriminatory terms," Ericsson said in a statement, according to the Journal.

Kasim Alfalahi, Ericsson's chief intellectual property officer, told FierceWireless in November that Ericsson has "hundreds" of patents covering GSM, GPRS, WCDMA, LTE and Wi-Fi technologies, which Samsung has licensed in the past for use in its mobile devices, including smartphone and tablets. "It's a large portfolio and it's a very broad patent portfolio that covers many Samsung products," he said.

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

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