Swedish phone maker Ericsson has sued South Korea's Samsung in the U.S. for infringing on its patents. For the past two years, the two firms have been attempting to negotiate a deal on patents that must be licensed on FRAND (fair, reasonable and non-discriminatory) terms.
CNNMoney's Mark Thompson reported, "The Sweden-based company, which makes technology for mobile networks, said Samsung had refused to renew a license agreement on the same basis - known as fair, reasonable and non-discriminatory (FRAND) terms - as its competitors. 'Ericsson has tried long and hard to amicably come to an agreement with Samsung and to sign a license agreement on FRAND terms,' Chief Intellectual Property Officer Kasim Alfalahi said in a statement. 'We have turned to litigation as a last resort.'"
TechCrunch cited a statement from Samsung, which said, "Samsung and Ericsson have previously negotiated and entered licensing deals. Now that the deal has to be renewed, we have faithfully committed ourselves to conducting fair and reasonable negotiations with Ericsson over the past two years, but this time Ericsson has demanded significantly higher royalty rates for 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."
Anna Ringstrom with Reuters noted, "According to Ericsson's statement, the company spent $5 billion in 2011 on research and development that resulted 'in hundreds of patented inventions that are essential to the standards that drive global communications,' such as GSM, GPRS and EDGE. Ericsson's intellectual property right net revenues amounted to 6.2 billion Swedish crowns ($938 million) in 2011."
According to Doug Tsuruoka from the Investor's Business Daily, "The Ericsson suit causes further legal complications for Samsung, which is already facing Apple (AAPL) in 20 patent disputes in 10 countries. Apple contends that some Samsung smartphone and tablet products infringed on its patents. Apple got a big win in August, as IBD reported, but the legal back-and-forth between the two leading smartphone makers continues."