Apple Inc. filed a complaint against Ericsson AB in California on Jan. 12 after both companies failed to come to an agreement about wireless-technology patents. The companies have reportedly been engaged in two years of negotiations to renew a licensing agreement for the patents used when making the iPad and iPhone.
Ericsson became a name in the mobile technology world after making handsets in the 1990s, and an Ericsson representative commented that there is a disagreement about how much patents are worth for the technology that is standard in phones and other devices. However, Apple claims Ericsson is asking for excessive amounts for their patents. In the filing, Apple claims that the company's achievements stem from billions of dollars' worth of research and work from engineers and that the Ericsson patents are not needed for long-term progress.
Apple believes Ericsson is attempting to claim royalties based on a percentage of the price of an entire Apple device. Apple's suit says the company should not be subject to paying royalties for the added price that comes from unique Apple technologies. In response, Ericsson also filed suit against Apple, and it asks the court to determine if its fees for the patent are fair.
Disputes in the technology world are not uncommon as new products often rely on basic standards that older companies pioneered. When creating new devices that use or work with patented technology, one must have licensing for the older technology. An attorney may be necessary when disagreements arise about patents or intellectual property.
Source: Bloomberg, "Apple, Ericsson Sue Each Other Over Phone Patent Royalties," Edvard Pettersson, Tim Higgins and Adam Ewing, Jan. 14, 2015