In January 2022, Apple has involved in a legal litigation with Sweden-based tech giant Ericsson at European court. Both companies have already sued each other in the United States since October 2021 as negotiations failed over the renewal of a seven-year licensing contract for telecoms patents.
Ericsson sued Apple first in October claiming that Apple was avoiding payments and cut down the royalty rates. Then Apple filed a lawsuit against Ericsson in December 2021 accusing the Swedish company of using “strong-arm tactics” and unfair to renew patents.
The main issue is over royalty payments for using 5G wireless patents in iPhones. Apple and Ericsson had signed a licensing contract over telecom patents in 2015. The contract ended in 2022 and Apple reportedly didn’t renew the licenses.
“Ericsson has refused to negotiate fair terms for renewing our patent licensing agreement, and instead has been suing Apple around the world to extort excessive royalties … we are asking the court to help determine a fair price,” an Apple spokesman said.
All devices require suitably licensing a patent which is known as Standards-Essential Patent (SEP). A global agreement exists that the licenses for such patents must be under FRAND terms — which means fair, reasonable and non-discriminatory. What this ensures is that the price is reasonable, and no company is allowed to charge one company more than another one.
Apple was using and licensing a lot of SEPs that were owned by Ericsson. Not just that but it was also licensing other patents that aren’t SEPs. Apple allegedly wanted to negotiate flexibly a lesser fee when the license expired.
Ericsson had severally sued Apple in the US and one more European country Netherlands, Brazil and Germany. Ericsson is arguing that Apple has violated its patents around 4G and 5G tech which is used in most iPhones. Apple has also alleged that Ericsson has infringed on its patents and is looking for a ban on imports of technology based on those patents. Ericsson may be looking for a ban on imports of iPhones as it alleges patent infringement by Apple. Since the licensing contract between the two companies hasn’t been renewed and lawsuits are being filed across continents, it could be a long-drawn battle. Notably, Ericsson had a long-standing legal dispute with Samsung as well over global patent licenses. The issue was settled last year in May 2021 but after a lengthy legal battle.
Sources: https://www.reuters.com https://timesofindia.indiatimes.com