Swedish telecoms kit maker Ericsson has filed suit against mobile maker Samsung in the US for patent infringement. The move follows nearly two years of negotiations to renew a FRAND patent licensing agreement between the pair, according to Ericsson. It’s unclear exactly which patents are involved but Ericsson said they relate to “a crucial system for technology sharing that has helped create today’s mass market communications industry”, adding in a statement
The dispute concerns both Ericsson’s patented technology that is essential to several telecommunications and networking standards used by Samsung’s products as well as other of Ericsson’s patented inventions that are frequently implemented in wireless and consumer electronics products.
The suit has been filed in the District Court for the Eastern District of Texas — where Ericsson’s U.S. headquarters are located.
According to Ericsson, senior management teams at the two companies have been negotiating for nearly two years after Samsung’s previous license for the patents expired. It said Samsung previously licensed the patents in 2001 and 2007, but after Ericsson extended an offer to renew the license for a third time Samsung refused to agree to the terms. Ericsson did not provide details of the terms — which are presumably more costly than earlier licensing terms — but did say the FRAND terms are the same terms as Samsung competitors have previously accepted.
“Ericsson has over 30,000 patents and more than 100 license agreements with all major players in the industry. Ericsson has tried long and hard to amicably come to an agreement with Samsung and to sign a license agreement on FRAND terms. We have turned to litigation as a last resort,” said Kasim Alfalahi, Chief Intellectual Property Officer at Ericsson, in a statement.
Ericsson said it has patented hundreds of inventions that are considered standards essential to the communications industry, including patents relating to GSM, GPRS, EDGE, WCDMA, LTE and 802.11. It claims to have spent $5 billion on research and development in 2011 alone. Reuters reports Ericsson’s IP right net revenues amounted to 6.2 billion Swedish crowns ($938 million) last year.
We’ve reached out to Ericsson and Samsung for comment and
will update this story with any response. see below for their responses.
Update: Ericsson said
13 24 patents are involved in the litigation, and they include but are not restricted to connectivity-related patents. The company would not comment on the terms of the license offer, or whether it differs from previous FRAND licenses agreed with Samsung in previous years, saying only: “We have offered a FRAND license to Samsung.”
For its part, Samsung claims the royalty rates Ericsson is asking for the patents are “excessive” — providing the following statement
Samsung and Ericsson have previously negotiated and entered licensing deals. Now that the deal has to be renewed, we have faithfully committed ourselves to conducting fair and reasonable negotiations with Ericsson over the past two years, but this time Ericsson has demanded prohibitively higher royalty rates for the same patent portfolio. As we cannot accept such extreme demands, we will take all necessary legal measures to protect against Ericsson’s excessive claims.
Update 2: Samsung has amended its statement to replace the wording “prohibitively higher” with the term “significantly higher” — the new statement follows below in full
Samsung and Ericsson have previously negotiated and entered licensing deals. Now that the deal has to be renewed, we have faithfully committed ourselves to conducting fair and reasonable negotiations with Ericsson over the past two years, but this time Ericsson has demanded significantly higher royalty rates for the same patent portfolio. As we cannot accept such extreme demands, we will take all necessary legal measures to protect against Ericsson’s excessive claims.
The blog also suggests this litigation may be advantageous in Apple’s ongoing U.S. court battle against Samsung, noting that
Apple may benefit from this hugely because Samsung will now have to argue that Ericsson’s demands, which were presumably not nearly as outrageous as what Samsung wanted Apple to pay, were outside the FRAND ballpark. Ericsson’s litigation forces Samsung to argue that FRAND rates should be low, while in the dispute with Apple, it takes the opposite position. Litigation proceeds pretty quickly in the Eastern District of Texas, so there’s a good chance that Apple will be able to use in its second California lawsuit (in which several of Samsung’s counterclaim patents are wireless SEPs) some of what Samsung has to argue in its defense against Ericsson.