In Sweden, Ericsson has just filed a patent infringement complaint against Apple. This concerns the payment of royalties for the use of 5G patents in iPhones.
A contract dating back to 2015
To understand the situation, we have to go back to 2015. At the time, the two companies entered into a seven-year and renewable contract relating to licenses for telecommunications patents covering 2G, 3G and 4G technologies. In 2021, the manufacturers wanted to negotiate so that this contract also covers 5G, but did not manage to agree.
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An event has indeed come to change everything in the meantime: the acquisition of Intel’s network chip division by Apple. Shortly after this acquisition, the Cupertino company warned any company that “ uses the power conferred by standardization to eliminate competition through selective patent licensing or discriminatory and excessive royalties “.
And while Ericsson is absolutely no longer renowned in the smartphone sector, the Swedish company holds more than 57,000 telecommunications patents, the royalties of which represent around a third of its operating profit. When it comes to its 5G patent, the company typically collects $2.50 to $5 in royalties per phone.
Ericsson wants a $5 royalty per iPhone. Photography: Jeremy Bezanger / Unsplash
Three complaints in total
Already last October, Ericsson had filed a complaint against Apple, accusing it of wanting to lower the price of this fee. The apple brand quickly retaliated in December by taking legal action to denounce questionable pressure methods on the part of the Swedish manufacturer in order to renew its patents.
Once again, Ericsson did not let it go and filed a second lawsuit against Apple this January 2022. ” Since the previous agreement expired, and we were unable to reach an agreement on the terms and scope of a new license, Apple is now using our technology unlicensed. said an Ericsson spokesperson.
For its part, Apple also seems very uplifted: “ Ericsson refused to negotiate fair terms for the renewal of our patent license agreement, and instead sued Apple worldwide to extort excessive royalties…we ask the court to help determine a price fair “said one of its spokespersons.
Apple is not in a strong position
As explained MacRumors, who spoke with Florian Mueller, an expert in intellectual property, the battle seems lost in advance for Apple. In question, a recent agreement established between Ericsson and Samsung after a long legal battle relating precisely to the use of 5G patents.
“ The overall circumstances lead me to believe that Ericsson is going to win this case, and the only leverage Apple has is the ‘hold-out’, I believe the Ericsson-Samsung license agreement involves a somewhat lower royalty rate on these Samsung phones that cost a fraction of an iPhone, but whenever Ericsson-Samsung licensing terms come into play (comparable licensing, non-discrimination), Ericsson can argue that even Samsung agreed to pay a royalty rate that is consistent with charging Apple $5 per iPhone “says Florian Mueller.
It would therefore not be surprising if the judges, once again, ruled in favor of Ericsson in its dispute with Apple.