Posted on 1/4/2015

Technology giants battle over patent license payments

Ericsson and Apple are at the centre of the latest patent dispute.

Swedish telecom equipment maker, Ericsson, has been engaged in a battle over patent license payments with US technology giant, Apple, in the United States.

This battle has now found its way into Europe with Ericsson claiming that, “Apple continues to profit from Ericsson’s technology without having a valid license in place.”  Ericsson has filed lawsuits in Britain, Germany and the Netherlands over technology license payments relating to the technology used in many features and functionalities of communication devices currently in the market.

Ericsson is claiming that Apple is continuing to sell products, such as the iPhone and the iPad, that infringe upon Ericsson patented technologies which relate to 2G and 4G LTE standards.  Apple is continuing to sell these products despite the expiration of a licensing agreement that was in place up to January 2015.

Ericsson has previously attempted to license its standard-essential patents with Apple under terms that are fair, reasonable and non-discriminatory (FRAND), however an agreement failed to be reached.  Apple has stated the reason for this as being the lack of a ‘fair rate’ offered by Ericsson.

Apple filed a lawsuit against Ericsson, claiming that the royalties demanded by the Swedish based company were excessive and not in line with the obligations set out in FRAND.  Ericsson countersued hours later, seeking $250 million to $750 million in royalties per year for Apple to continue licensing its patented wireless technologies.

In 2014, Samsung Electronics Co agreed to pay Ericsson $650 million plus years of royalties in order to call an end to a licensing dispute.

If Ericsson prevails in their current dispute with Apple, analysts estimate that the US tech giant will have to pay between $240 million to $725 million annually, based on estimates of levels of handset sales and royalty payments per phone.

Wilson Gunn