Klein & Wilson

Apple and Ericsson go to court over licensing dispute

According to sources, Apple Inc. and Ericsson have filed lawsuits against each other due to a licensing dispute. Apple filed a lawsuit in California claiming that Ericsson is charging excessive fees for use of its patents and that the patents themselves may not be essential in devices that Apple makes. Ericsson filed a lawsuit in Texas district court asking for a determination as to whether or not its fees are fair.

Although the two companies have been negotiating a new licensing deal for two years, there has not been much progress. Apple says that Ericsson wants the company to pay royalties based on the total value of each device sold. Currently, Apple uses basic technology developed and patented by Ericsson in its popular iPhone. However, Apple wants to pay royalties on a smaller base.

In addition to questions about handset royalties, a change to the way Wi-Fi patents may be licensed in the future could have an impact on the case. Proposed changes by the Institute of Electrical and Electronics Engineers may be introduced on Feb. 5, and Apple's lawsuit takes those potential changes into consideration.

Over time, it is possible that partnership disputes will arise that may need to be settled in court. If a case does go to court after failed negotiations, it may be necessary to have the assistance of a business law attorney. A legal professional might argue for the other party to respect the rights of a patent or trademark holder and pay fair compensation for the right to use intellectual property. If successful, the party improperly using trademarked or patented material may have to pay damages or stop using said material.

Source: Bloomberg, "Apple, Ericsson Sue Each Other Over Phone Patent Royalties," Edvard Pettersson, Tim Higgins and Adam Ewing, Jan. 14, 2015

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