Ericsson Sues Samsung in Licensing Dispute over Wireless Patents
While Apple is pounding at Samsung from one side of the patent fence, Ericsson has decided to pound from the other side. Citing nearly two years of failed licensing negotiations, Ericsson on Tuesday filed a patent infringement lawsuit against the maker of Galaxy S smartphones.
Ericsson said the intellectual-property dispute relates to its patented technology essential to several telecommunications and networking standards that Samsung is using in its products. Ericsson also pointed to violations of its patented inventions frequently implemented in wireless and consumer electronics products.
"By the end of 2012 there will be approximately 6.6 billion subscriptions in the world. The sharing of technology in the telecom industry is one of the main drivers behind this development," said Kasim Alfalahi, chief intellectual property officer at Ericsson. "The telecom ecosystem builds on fair and reasonable terms that have created an attractive global mass market for mobility and broadband with Ericsson as a main contributor."
Ericsson Wants Fair Value
Ericsson is indeed a main contributor, having helped create the mobile telephone system by contributing hundreds of its inventions to the standard in exchange for a fair royalty. Ericsson holds one of the strongest patent portfolios in the industry with more than 30,000 patents worldwide and has signed more than 100 license agreements with all major players in the industry.
Ericsson pointed out that it spent $5 billion on research and development in 2011 alone -- and that that research resulted in hundreds of patented inventions essential to the standards that drive global communication. Ericsson specifically named GSM, GPRS, EDGE, WCDMA, LTE and 802.11 as well as patented inventions that are widely implemented in most wireless and consumer electronics products.
Ericsson alleged Samsung refused to renew its license to Ericsson's industry leading portfolio of telecommunications patents on the same terms that its competitors have previously accepted. Samsung could not immediately be reached for comment. According to Ericsson, Samsung previously licensed its patents in 2001 and renewed in 2007, but its license has now expired.
"Ericsson has over 30,000 patents and more than 100 license agreements with all major players in the industry," Alfalahi said. "Ericsson has tried long and hard to amicably come to an agreement with Samsung and to sign a license agreement on FRAND [Fair, Reasonable And Non-Discriminatory] terms. We have turned to litigation as a last resort."
Patent Price Disputes
Charles King, principal analyst at Pund-IT, said the dispute looks more like a disagreement over price than a blanket issue of using the technology without permission.
"I don't know if the litigation will result in a determination of what fair value actually is. I haven't seen any reference to the prior value of the license or the increase in cost that Ericsson may be asking," King told us.
"Especially since this is a package of technologies that Samsung has licensed before, the company may appeal that some of those patents and technologies and features are getting a little long in the tooth and are less valuable today because they are not as critical now that the industry has moved over to the new wireless standards."
The complaint is filed in U.S. District Court for the Eastern District of Texas, which is where Ericsson's U.S. headquarters is located.