Apple Inc. (AAPL) Sued by Ericsson (ADR) (ERIC) for LTE Royalty

Apple (AAPL)

Apple Inc. (NASDAQ:AAPL) is facing a counter suite from Ericsson (ADR) (NASDAQ:ERIC), in a patents war that the two companies have waged against each other. The Swedish telecoms supplies company hit the Cupertino, California-based tech giant with a complaint regarding mobile tech  licenses, apparently in retaliation to the case filed by Apple, wherein the iPhone maker sued Ericsson for charging excessive royalties over its LTE patents.

In its earlier complaint against Ericsson filed on January 12, Apple Inc. (NASDAQ:AAPL) argued it has not violated the Swedish company’s patents, nor does it owe them any royalty payments, saying that its wireless LTE patents are not necessary for industry cellular standards.  Apple added that in case the court finds the patents as essential, a reasonable royalty rate should be determined.

Apple (AAPL)The two companies have been negotiating for two years on end regarding licensing of Ericsson’s patents, and without reaching a common ground for agreement, have decided against each other to seek a court’s judgment. According to Kasim Alfalahi, Ericssons chief intellectual property officer, Ericsson has tried in vain to ink a new agreement with Apple Inc. (NASDAQ:AAPL), a valued business partner for  years. Failure of the negotiations, however, forced Ericsson to go to the court, seeking for a ruling that  its licensing fees are fair, reasonable, and non-discriminatory (FRAND). Alfalahi added that it is reasonable for Ericsson to expect royalties from companies that reap benefits in a development it made in the past 30 years.

Apple Inc. (NASDAQ:AAPL) signed an agreement with Ericsson back in 2008, obtaining license for several of Ericssons supposedly standard-essential patents. In its filing, Ericsson particularly states that Apple’s license of using the LTE technology on its iPads and iPhones have expired. Apple spokeswoman Kristin Huguet noted that the iPhone maker is willing to pay Ericsson a reasonable amount for patents on technology used in its products, but is in disagreement with the company regarding what is fair when it comes to rates for such fees. Analysts estimates that in case a ruling is issued in favor of Ericsson, Apple would have to pay an amount ranging from $250 million to $750 million.

This article has been written by Nonito Guntan.

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