Apple Faces Ericsson Lawsuit After Refusing Licensing Deal

[MacRumors]

Apple faces further legal action from Ericsson this week after refusing to accept a licensing deal for its patented LTE technologies, according to The Wall Street Journal. The Swedish networking company on Friday said it is suing Apple for infringing 41 wireless-related patents that it believes are critical to the functionality of products such as the iPhone and iPad.

"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," the company said in a statement.

Ericsson has filed two complaints with the U.S. International Trade Commission in an effort to secure an exclusion order against Apple, which could block the iPhone, iPad and other products involved from being sold in the United States. The company has also filed seven complaints with the U.S. District Court for the Eastern District of Texas as part of the negotiations. Apple's previous licensing deal with Ericsson expired in mid-January.

Apple originally filed suit against Ericsson on January 12, arguing that it was demanding excessive royalties for patents not essential to LTE standards. Ericsson countersued in a Texas courtroom just hours later, seeking an estimated $250 million to $750 million in royalties per year for Apple to continue licensing its patented wireless technologies. Ericsson is the world's largest provider of mobile network equipment and holds over 35,000 patents related to 2G, 3G and 4G wireless technologies.

Apple was ordered to pay Smartflash LLC a $533 million settlement earlier this week in a separate patent lawsuit.

Article Link: Apple Faces Ericsson Lawsuit After Refusing Licensing Deal

 

[richwoodrocket]

Wouldn't it be the carrier's fault...

 

[Crosscreek]

Texas is a bad state to get sued in.

 

[maflynn]

Reminds me of the Nokia lawsuit some years back where Apple tried to avoid the licensing deals and lost.

 

[mejsric]

Texas's Jury $-$

 

[demodave]

https://www.macrumors.com/2015/02/27/apple-ericsson-patent-lawsuit/

[snip]

Apple originally filed suit against Ericsson on January 12, arguing that it was demanding excessive royalties for patents not essential to LTE standards. Ericsson countersued in a Texas courtroom just hours later, seeking an estimated $250 million to $750 million in royalties per year for Apple to continue licensing its patented wireless technologies. Ericsson is the world's largest provider of mobile network equipment and holds over 35,000 patents related to 2G, 3G and 4G wireless technologies.

Article Link: Apple Faces Ericsson Lawsuit After Refusing Licensing Deal

Yet another sad case of Patent Trolls looking for Apple's money in Tyler, Texas. (I live in Dallas, it's nothing against Tyler. It's just the ambulance-chaser/troll mentality that kills me.)

The thing is, at $250 million a year, an individual Apple C-Level could pay it off and be done with it. I think we're looking more at a "principle of the matter" issue for Apple, and the whole thing is just a big tempest in a teapot.

 

[bushido]

that actually seems reasonable to me in that case.

Ericsson licenced patented technology to Apple so Apple agreed to it in the past
Negotiations broke down over continued licencing
Licence expired
Apple continued to used the tech without permission
Ericsson offered to have a third party determine a fair compensation

 

[rdlink]

Okay, so here is a place where patent reform could be had, I think fairly easily.

Apple and Ericsson had a licensing agreement in place that expired. So they both acknowledged that there was a valid patent, and that it was reasonable to license said patent for usage in the devices.

Essentially, this is nothing more than a business negotiation that Ericsson has now taken to litigation. The result is that Apple is now forced to either roll the dice in a jurisdiction that is known to be unfriendly to defendants, or settle with essentially a gun to their head.

Why not create a mediation panel, tied to the USPTO that hears disputes such as this? Each side presents their case, and the panel determines questions of patent validity and value. If either of the parties is unhappy enough with their findings they can appeal the decision through the Federal appeals courts.

At least with this methodology these important decisions can be kept out of the hands of the kangaroo courts in the Eastern Division of Texas.

 

[Lennholm]

Calling Ericsson a "patent troll" is hilarious. This is the company that together with Nokia, Motorola etc. invented and built the entire mobile infrastructure that Apple, Samsung and everyone else on the market now relies on.

 

[neuropsychguy]

Apple continued to used the tech without permission
Ericsson offered to have a third party determine a fair compensation

Apple figured it would be cheaper to settle this in court than to pay what Ericsson was asking. Ericsson has a good case; what they might not have a good case for is the amount of money they are requesting in the suit and for the license fees.

 

[69Mustang]

Yet another sad case of Patent Trolls looking for Apple's money in Tyler, Texas. (I live in Dallas, it's nothing against Tyler. It's just the ambulance-chaser/troll mentality that kills me.)

The thing is, at $250 million a year, an individual Apple C-Level could pay it off and be done with it. I think we're looking more at a "principle of the matter" issue for Apple, and the whole thing is just a big tempest in a teapot.

This makes no sense at all. This case has no resemblance to a patent troll case and I'm not sure why you think an individual C-Suite player at Apple could pay $250 million, and as you say, be done with it.

Okay, so here is a place where patent reform could be had, I think fairly easily.

Apple and Ericsson had a licensing agreement in place that expired. So they both acknowledged that there was a valid patent, and that it was reasonable to license said patent for usage in the devices.

Essentially, this is nothing more than a business negotiation that Ericsson has now taken to litigation. The result is that Apple is now forced to either roll the dice in a jurisdiction that is known to be unfriendly to defendants, or settle with essentially a gun to their head.

Why not create a mediation panel, tied to the USPTO that hears disputes such as this? Each side presents their case, and the panel determines questions of patent validity and value. If either of the parties is unhappy enough with their findings they can appeal the decision through the Federal appeals courts.

At least with this methodology these important decisions can be kept out of the hands of the kangaroo courts in the Eastern Division of Texas.

That is a damn reasonable way to handle these situations. Also I think it is exactly as you said, a break down in contract negotiations. There's no question of the validity of the patents in this case.

 

[lukarak]

Wait, why doesn't Apple just buy chips from Qualcomm? Shouldn't they pay for the tech they are using?

Also, if you want to make your tech part of a standard, then it has to go cheap. 750 million is not cheap.

 

[69Mustang]

Apple figured it would be cheaper to settle this in court than to pay what Ericsson was asking. Ericsson has a good case; what they might not have a good case for is the amount of money they are requesting in the suit and for the license fees.

Ericsson's lawyer used the term fair and reasonable. I wonder if he was referencing FRAND or using legalese to make the implication without the patents actually falling under FRAND?

If the patents do fall under FRAND I think Apple may have less a leg to stand on.

 

[lukarak]

Calling Ericsson a "patent troll" is hilarious. This is the company that together with Nokia, Motorola etc. invented and built the entire mobile infrastructure that Apple, Samsung and everyone else on the market now relies on.

And also chose to make it a standard, which means that it is forced on everybody and then they should only be compensated slightly above cost of developing that tech. Their revenue should come from volume, because everybody uses it.

 

[Schizoid]

I love lawyers...

Just wondering if you can counter-counter sue someone?

"people like us can't afford justice" - M.Simpson

 

[usersince86]

High Tech 2015: everybody sue everybody!

 

[barkomatic]

Yet another sad case of Patent Trolls looking for Apple's money in Tyler, Texas. (I live in Dallas, it's nothing against Tyler. It's just the ambulance-chaser/troll mentality that kills me.)

The thing is, at $250 million a year, an individual Apple C-Level could pay it off and be done with it. I think we're looking more at a "principle of the matter" issue for Apple, and the whole thing is just a big tempest in a teapot.

Ericsson is a real company with employees that provides real services and products. They do not meet the definition of a patent troll.

If Apple has infringed on their patents then they have to pay royalties. Just because Apple is a big company that makes your favorite hardware and/or you own stock in doesn't justify theft of innovation.

 

[69Mustang]

And also chose to make it a standard, which means that it is forced on everybody and then they should only be compensated slightly above cost of developing that tech. Their revenue should come from volume, because everybody uses it.

You are assuming facts not in evidence. If indeed the patents are covered under FRAND, it's the FRAND rate that Apple is not paying. The $250-750 relates to the court case. As in if you don't want to pay the FRAND rate, then we will assess a market rate of $750 million.

We don't know if the patents are FRAND, but the $250-750 million is a separate issue.

 

[samcraig]

Yet another sad case of Patent Trolls looking for Apple's money in Tyler, Texas. (I live in Dallas, it's nothing against Tyler. It's just the ambulance-chaser/troll mentality that kills me.)

The thing is, at $250 million a year, an individual Apple C-Level could pay it off and be done with it. I think we're looking more at a "principle of the matter" issue for Apple, and the whole thing is just a big tempest in a teapot.

Believing that this case has anything to do with patent trolls makes be believe that you shouldn't be commenting in this thread.

My .02.

 

[mw360]

that actually seems reasonable to me in that case.

Ericsson licenced patented technology to Apple so Apple agreed to it in the past
Negotiations broke down over continued licencing
Licence expired
Apple continued to used the tech without permission
Ericsson offered to have a third party determine a fair compensation

This case isn't about win or lose. Whatever happens Apple will end up paying. It's just the amount that's in question, and whether its less than Ericsson were demanding.

 

[BigBeast]

Sounds like the patents we about to expire, and Apple headed into the boardroom expecting a quick deal to continue their licenses. But when Apple sat down for negotiations, Ericsson wanted more money for the licenses than before. Apple perplexed, reasoned that no new technologies were created and being asked for- they just wanted the same price as before, and then everyone could go play a few holes of golf and head home in their G5's. Well Ericsson knows they had Apple by the balls, and walked out of the door without making a deal, knowing they could tarnish Apple's name by making this process public- using "fair and reasonable" terminology to steer biased toward Ericsson.

This is all conjecture of course.

 

[Rafterman]

Time to void all patents. You can''t take a dump now without someone patenting it.

 

[PinkyMacGodess]

Funny. I keep reading 'Texas courtroom' whenever I hear crazy lawsuits over copyright and patents.

It's as if there is something about those Texas courts down there that makes them so popular...

Is it because Texas has a 'whole nother' concept of 'justice'?

----------

Time to void all patents. You can''t take a dump now without someone patenting it.

That is actually very nearly true. Poop is now a medical product. I can see people being fed certain diets now, just to produce the bast poo they can, which will be patented, and copyrighted to the nth level.

 

[markgpearse]

Not Essential

Apple says the patents are not essential to LTE standards. If that is the case, then why not simply not use the patents?

 

[Reason077]

Wait, why doesn't Apple just buy chips from Qualcomm? Shouldn't they pay for the tech they are using?

Apple does buy it's LTE modem chips from Qualcomm. Clearly, just buying the chips doesn't automatically include assignment of patent rights - they aren't Qualcomm's patents anyway.