|By Maureen O'Gara||
|November 28, 2012 08:15 AM EST||
Ericsson, the big Swedish telecom house, has sued Samsung, the big Korean conglomerate, in the plaintiff-friendly US District Court for the Eastern District of Texas charging patent infringement and breach of contract.
It said that after two years of negotiations involving the most senior management of both companies Samsung refused to renew a license for standards-essential patents (SEPs) that it was offered on fair, reasonable and non-discriminatory (FRAND) terms so Ericsson "has turned to litigation as a last resort."
Samsung licensed the patents in 2001 and renewed the deal in 2007 but the license is now expired and it won't pay what Ericsson figures is a FRAND rate although it offered Samsung "many alternative FRAND royalty structures and frameworks" over the last two years.
Ericsson said it "believes it must take action to support a crucial system for technology sharing that has helped create today's mass market communications industry."
The charge is a turnaround for Samsung, which is suing Apple for infringing its FRAND-pledged patent that it can only license on grossly exorbitant terms, which is why Samsung is being investigated for so-called FRAND abuse by regulators in both the US and Europe.
However, it seems that Ericsson now finds itself in kind of the same situation as Apple. According to FOSS Patents, Samsung has refused to license its patents to Ericsson on FRAND terms.
Ericsson says "Upon information and belief, Samsung refuses to license Ericsson...any declared standard-essential patents that it owns in an effort to compel Ericsson to license its patent portfolio at a small fraction of the rates that its competitors pay. This position violates Samsung's FRAND commitment."
It is a charge FOSS Patents believes Apple will use in court to complain about its treatment by Samsung and how the Korean company wants to buy FRAND patent rights low and sell them high.
Not all the patents Ericsson wants Samsung to license are standards-essential. The rest, it says, cover patented Ericsson inventions that are frequently implemented in wireless and consumer electronics products.
Ericsson says it's helped create the mobile telephone system by contributing hundreds of its inventions to standard bodies in exchange for a fair royalty and has signed more than 100 license agreements with all major players in the industry.
In 2011 alone, it goes on, it spent $5 billion on R&D that resulted in hundreds of patented inventions that are essential to the standards that drive global communications such as GSM, GPRS, EDGE, WCDMA, LTE and 802.11.
It pointed out that it has one of the strongest patent portfolios in the industry with more than 30,000 patents worldwide and that it's "committed to licensing its standard-essential patents on Fair, Reasonable and Non-Discriminatory (FRAND) terms for the benefit of the industry."
Ericsson's chief intellectual property officer Kasim Alfalahi said in a statement that "By the end of 2012 there will be approximately 6.6 billion mobile subscriptions in the world. The sharing of technology in the telecom industry is one of the main drivers behind this development. The telecom ecosystem builds on fair and reasonable terms that have created an attractive global mass market for mobility and broadband with Ericsson as a main contributor."
Happily for Ericsson, which is seeking an injunction, its US headquarters is located in the Eastern District of Texas.
It wants the court to say FRAND pledges are an enforceable contract and that Samsung's refusal to license its SEPs on FRAND terms is a breach of that contract.
It wants damages for the breach of contract. And it wants the court to "enter an injunction enjoining Defendants, and all others in active concert with Defendants, from enforcing any patent claim that Samsung Electronics contends or has alleged in any context is necessary to implement a standard adopted by an industry standard-setting group" and it wants the court to "enter an injunction requiring Defendants, and all others in active concert with Defendants, to license any patent claim that Samsung Electronics contends or has alleged in any context is necessary to implement a standard adopted by an industry standard-setting group on fair, reasonable, and non-discriminatory terms to Ericsson."
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