Ericsson has filed a lawsuit against Apple to force the iPhone maker to pay what it considers to be fair royalties for its 5G patents.
Standards Essential Patents (SEPs) are innovations that have contributed to industry standards, such as 5G, and can be used by anyone for a reasonable fee. Fair, affordable, and nondiscriminatory (FRAND) terms are used to describe these rates.
In practice, this means that anyone who incorporates a SEP into their product must pay a royalty to the patent owner. To avoid the risk of a legal dispute – which is not uncommon among significant vendors – some companies with large portfolios of SEPs implement royalty caps.
Patents owned by Ericsson
Huawei, for example, has set a royalty cap of $2.50 per device, while Nokia has set a limit of $3.57.
Ericsson and Apple have previously been involved in legal battles, most recently in 2015, when their differences resulted in a seven-year deal that will expire in 2022. Apple argued that its devices did not infringe on Ericsson’s patents, that the patents in question were not essential, and that Ericsson’s royalty demands were excessive during that particular episode.
Apple argued that payments should be based on the value of the components that use the technology rather than the device’s overall value.
Ericsson claims in a lawsuit filed in Texas that Apple still wants to use its methodology to determine which patients are SEPs, valid, and infringed on.
According to the Swedish telecoms equipment manufacturer, this approach is an attempt to avoid paying reasonable fees and ignores the wide-ranging patent agreements that companies have traditionally agreed upon.
“On October 4, 2021, Ericsson requested a declaration from the United States District Court for the Eastern District of Texas, Marshall Division, that Ericsson complied with its FRAND commitment and all other applicable laws and policies that would affect the terms of Ericsson and Apple’s prospective licence,” an Ericsson spokesperson told TechRadar Pro.
“For technology leaders like Ericsson, who invest heavily in R&D from the start, the ability to receive fair compensation through patent licencing is critical to ensuring new investments in innovation and the success of open, collaborative standardisation.”
“The case is still ongoing, and Ericsson will make no further statements at this time.”