Ericsson (ADR) (NASDAQ:ERIC) has filed a patent infringement lawsuit against Samsung, claiming that the South Korean mobile phone maker is no longer entitled to use its telecommunications technology, after a licensing agreement expired.
The technology is said to be essential for many of Samsung’s mobile and consumer electronic products.
The lawsuit, which was filed at a court in Eastern Texas - where Ericsson (ADR) (NASDAQ:ERIC) has its US headquarters – says that Samsung refused to renew the licensing agreement on fair, reasonable, and non-discriminatory terms after two years of negotiations between senior executives of both companies.
Ericsson is now seeking damages relating to the use of the patents, since the lease on the agreement expired last year. The licensing agreement was originally made in 2001, and renewed in 2007.
In a statement, Samsung said: “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. As we cannot accept such extreme demands, we will take all necessary legal measures to protect against Ericsson’s excessive claims.”
Although Ericsson (ADR) (NASDAQ:ERIC) would not detail the level of damages incurred, or on what terms it wishes to renew the licences, the company pointed to the net revenue of £580 million that it generated last year from more than 100 licensing agreements.
The company, which holds over 30,000 patents worldwide and has signed more than 100 licensing agreements with major industry players, said the dispute related to telecommunications and networking standards, as well as patents used in wireless and consumer electronics. It also included a range of technologies used in 2G, 3G, and 4G networks, as well as touchscreen and handset antennas.
Kasim Alfalahi, chief intellectual property officer at Ericsson, said: “Despite nearly two years of negotiations, Samsung has refused to renew its licence,” and that one possible outcome of the lawsuit could be the exclusion of the technologies from Samsung products.
Samsung is also currently locked into a costly patent battle with Apple – both companies have accused each other of infringing software patents. Furthermore, Apple accused Samsung of infringing its design patents.
In August, a Californian jury found that Samsung had infringed the majority of the patents in question and recommended that Apple receive over $1 billion in damages. Samsung has asked for a judge to overturn the verdict and order a new trial.