Apple Sues Ericsson over LTE Wireless Connectivity Licensing Fees

Apple sought a federal court in California to come up with a ruling that Ericsson's patents are not essential to LTE standards. Apple further argues that the Stockholm-based company is charging royalty rates that are excessive.

Ericsson based the rates of its royalty fees on the price of a complete handset instead of calculating it based on the component that uses the technology. The company agreed to license the patents to Apple, which began in 2008 when the original iPhone was launched.

Much of the revenue source of Apple comes from the iPhone, which began to hit the stores in 2007. In its complaint, Apple also stressed how the iPhone and iPad revolutionized the smartphone industry.

"Ericsson seeks to exploit its patents to take the value of these cutting-edge Apple innovations," said Apple.

According to Apple, royalties should be based on the value of the processor chip with the technology. Apple believes that the company has not infringed on the patents and that it doesn't owe royalties for the patents in question.

If the court judges that Ericsson's patents are indeed essential and that Apple is guilty of infringement, then the iPhone maker would ask the court to decide a different royalty rate that is reasonable.

"We've always been willing to pay a fair price to secure the rights to standards essential patents covering technology in our products," said Kristin Huguet, Apple spokeswoman. "Unfortunately, we have not been able to agree with Ericsson on a fair rate for their patents so, as a last resort, we are asking the courts for help."

Ericsson has filed patent-related lawsuits in the past, which involved other smartphone makers such as Samsung and Xiaomi. Its dispute with the Korean manufacturer was settled in January with a new licensing agreement on wireless technology found in smartphones, tablets, TVs and Blu-Ray disk players.

With regard to Xiaomi, Ericsson sued the Chinese manufacturer last year for failing to license its inventions.

Ericsson spokesman Johannes Persson said that since his company at that time owned patents that were essential for wireless technologies in the 2G, 3G and 4G categories, any manufacturers whose products are compliant with such standards ought to secure licenses.

"Under Ericsson's approach, by incorporating its own unique technologies, Apple is subjecting its products to higher royalty demands than other companies' products that do not incorporate such features and functionalities," said Apple in the complaint.

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