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Last updated on April 18, 2014 at 0:14 EDT

Refusal Of FRAND Terms Gets Samsung Into Hot Water With Ericsson

November 27, 2012

Michael Harper for redOrbit.com — Your Universe Online

Ericsson, the world´s largest provider of telecommunications equipment, has just become the next company to engage in legal warfare with Samsung.

According to a recent press statement, the Swedish telecoms maker has said they arrived at this decision after Samsung “refused to sign a license agreement on FRAND (Fair, Reasonable and Non-Discriminatory) terms, despite two years of negotiations.”

Ericsson has filed this lawsuit in a US District Court for the Eastern District of Texas, home to their US headquarters in Plano, TX.

“Ericsson has tried long and hard to amicably come to an agreement with Samsung and sign a license agreement on FRAND terms,” explained Ericsson´s chief intellectual property officer, Kasim Alfalahi, speaking in the press statement.

“We have turned to litigation as a last resort.”

According to the statement, Samsung had refused to renew their license to use patents found within Ericsson´s portfolio. Samsung first licensed these patents in 2001 and then renewed in 2007. Since then, the agreement has lapsed and Samsung has been unwilling to sign a new agreement with the same FRAND terms.

Samsung, on the other hand, has said Ericsson has changed their terms and are now asking for more money.

“Samsung has faithfully committed itself to conducting fair and reasonable negotiations with Ericsson over the past two years, but Ericsson has demanded prohibitively higher royalty rates to renew the same patent portfolio,” said a Samsung spokesperson, speaking to Reuters.

The South Korean company has also said they´ll “take all necessary legal measures to protect against Ericsson´s excessive claims.”

Ericsson has not commented on the size of the suit they’re bringing against Samsung.

Ericsson´s lawyers have also claimed that Samsung´s refusal to license standards-essential patents on FRAND terms is a way to force the Swedish company into licensing their patents at a much lower price than their competitors pay. According to Florian Mueller with the Foss Patents blog, Apple had a similar argument with Samsung during their American court battle.

Apple could also use these allegations in their favor.

While Ericsson has not commented on the size of this case, they are seeking an injunction against Samsung devices, filing a suit for infringement claims as well as a suit for contract claims.

Samsung and Apple famously duked it out this summer in a California court room, a legal tussle which resulted in a $1.05 billion payout to Apple. With both companies gearing up for another clash in 2014, Mueller points out that Apple could use this lawsuit to its favor.

If Samsung argues that the demands made by Ericsson are outside of the FRAND realm, Apple could argue that Ericsson´s terms are much lower than the terms Samsung wanted Apple to pay to license their patents. Samsung´s argument is essentially that FRAND rates should be kept low, an argument which Apple can use in their favor in the future.

As they prepare for their next run-in, Apple and Samsung have been busy filing different products which they believe violate one another´s patents. Apple this weekend added 6 Samsung devices to their list of complaints, including the new Samsung Galaxy Note II, Galaxy S III Mini and Galaxy S III with Android 4.1. Samsung has also recently added the new iPhone 5, iPad mini and newest iPod Touch to their suit.


Source: Michael Harper for redOrbit.com – Your Universe Online