Ericsson hits Samsung with suit over patent licensing
Swedish telecoms company Ericsson has taken Samsung to court, alleging that the South Korean company has breached its Fair, Reasonable and Non-Discriminatory (FRAND) obligations.
In a suit filed Friday, December 11, at the US District Court for the Eastern District of Texas, Ericsson accused Samsung of violating contractual commitments to negotiate in good faith and to license patents on FRAND terms and conditions.
Ericsson is seeking a declaration that it has complied with its FRAND commitment and that Samsung has breached them.
In 2014, Samsung and Ericsson executed a multi-year agreement and, last year, in advance of the expiration of the existing cross-licence, Ericsson took steps to initiate negotiations with Samsung towards a new licence, according to the claim.
But, said Ericsson, Samsung didn’t accept Ericsson’s proposed global cross-licence offer and instead provided a counteroffer that evidenced Samsung was “not negotiating in good faith towards a cross-licence on FRAND terms”.
“Instead, Samsung insisted it would only be willing to a cross-licence if Ericsson agreed to accept a royalty for Ericsson’s essential patents significantly below FRAND rates,” said the complaint.
It added: “At this point, it is clear that Samsung is not willing or committed to negotiating a global cross-licence on FRAND terms and conditions.”
Ericsson announced that the potential legal costs and delayed royalty payments could reduce its operating income by SEK1-1.5 billion ($118-$177 million) per quarter beginning in the first quarter of 2021. A shift in sales from 4G to 5G handsets is also expected to impact royalty payments.
This isn’t the first time the two companies have locked horns. In 2012, Ericsson accused Samsung of infringing 24 standard-essential patents covering technologies related to wireless communications.
The companies resolved their dispute after two years, with Samsung paying Ericsson $650 million, alongside years of royalties.
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