NEW YORK: Apple Inc. (AAPL) and Ericsson AB are suing each other in the U.S. after failing to agree on the pricing of wireless-technology patents used by the maker of the iPhone and iPad.
Apple, saying Ericsson is seeking excessive royalty rates, yesterday asked a federal court in California to rule that Ericsson’s patents aren’t essential to long-term evolution, or LTE, standards. Stockholm-based Ericsson said today that it filed a complaint in a district court in Texas asking for a verdict on whether its fees are fair.
Apple’s iPhone and iPad have won over users in recent years. Ericsson helped pioneer the mobile-device market with its handsets in the 1990s. The company sold its mobile-phone business to Sony Corp. in February 2012, five years after Apple introduced the iPhone.
“Ericsson seeks to exploit its patents to take the value of these cutting-edge Apple innovations, which resulted from years of hard work by Apple engineers and designers and billions of dollars of Apple research and development — and which have nothing to do with Ericsson’s patents,” Cupertino, California-based Apple said in its complaint.
Ericsson has been aggressive in defending its patents. It sued Samsung Electronics Co. (005930) in 2012 for infringement, saying the South Korean phonemaker failed to extend a licensing deal after years of negotiations. The two sides reached a settlement a year ago with a new licensing deal over wireless technology in smartphones, TVs, tablets and Blu-ray disk players. The deal boosted Ericsson’s 2013 fourth-quarter sales by 4.2 billion kronor ($520 million) and net income by 3.3 billion kronor.
At the core of the dispute is Apple’s contention that Ericsson wants Apple to pay royalties based on percentage of the price of the entire device. Apple argued it should be set on a smaller base and called Ericsson’s demands unreasonable.
