Ericsson sues Apple over 5G SEP licensing rates
Ericsson has asked a Texas district court to declare that its 5G patent licensing rates are fair and reasonable in order to clear negotiations with Apple.
The Swedish telecoms company claims that Apple wrongly accused Ericsson’s licensing practices of violating fair, reasonable, and non-discriminatory (FRAND) terms and accuses the tech giant of attempting to leverage its “superior financial position” to drive down royalty rates in negotiations.
The complaint, filed October 4, seeks a ruling from the US District Court for the Eastern District of Texas that Ericsson is compliant with European Telecommunications Standards Institute (ETSI) licensing policy and that it is prepared to grant licences to its standard-essential patents (SEPs) on FRAND terms.
Apple’s FRAND policy requires patent holders to litigate the validity and essentiality of their patents before it will agree to license an SEP, according to the complaint.
Apple’s critiques of Ericsson’s licensing practices started after Ericsson publicly announced its ex ante 5G/NR multimode royalty rates in March 2017, which is priced at $5 per handset, with a $2.50 option for lower-priced models.
Ericsson said: “During the course of the parties’ discussions, Apple has shown no inclination to retract, or even soften, its prior public statements that the licensing policies underlying Ericsson’s ex ante 5G rates that apply to Apple phones violate FRAND.”
On Apple’s terms
According to the complaint, Apple has accused patent holders of concealing licensing terms from the industry until the standard rate is “frozen” in order to obtain the highest possible rates.
To counteract this, Apple requires all patent owners to prove every patent licensed is essential, infringed, valid, and enforceable before Apple will agree to take a licence.
“In sum, even before the first licensing meeting between Apple and Ericsson, Apple had already publicly proclaimed Ericsson’s licensing programme as discriminatory, Ericsson’s rates as violating FRAND, and had publicly committed that Apple would only license essential patents on its own, self-proclaimed terms and conditions intended to devalue essential patents,” the complaint says.
Licensing agreements
Apple first licensed essential patents for Ericsson’s 2G and 3G technology in 2008 when it released its first iPhone model.
The two companies later struck a cross-licensing deal for 2G, 3G, and 4G cellular standards in 2015 following an almost year-long dispute over royalty rates. Ericsson was paid an undisclosed amount upfront, alongside ongoing royalties over seven years, according to the Wall Street Journal .
This lawsuit follows a recent ruling from the English High Court that could see Apple hit with a sales ban in the UK if it refuses to accept FRAND terms from Texas patent holder Optis.
The court handed down the decision on September 27, which concluded that Apple must accept the terms of the agreement even before they are determined during a trial scheduled for June 2022.
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