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Ericsson Sues Samsung After Patent Licensing Talks Fail

Ericsson Sues Samsung as Patent Licensing Negotiations Fail
Ericsson AB's shares rose 0.1 percent to 59.9 kronor at 12:02p.m. in Stockholm trading, underperforming Sweden’s benchmark OMX Stockholm 30, which was up 0.2 percent. Photographer: Linus Hook/Bloomberg

Ericsson AB, the world’s largest maker of wireless networking equipment, sued Samsung Electronics Co. for patent infringement, saying the South Korean phone maker failed to extend a licensing deal after years of negotiations.

Ericsson said in the lawsuit filed in U.S. federal court in Texas that Samsung is improperly using its technology for mobile phones after a previous agreement expired. The Stockholm-based company said it offered to extend the deal on fair and reasonable terms, known as FRAND.

“These negotiations have been unsuccessful for the simple reason that Samsung refuses to pay the FRAND rate paid by its competitors for Ericsson’s standard-essential patents,” Ericsson said in the suit filed today in the U.S. District Court for the Eastern District of Texas.

Samsung is engaged in separate patent battles around the globe with Apple Inc. as the two companies fight for dominance in the smartphone and tablet computer markets. Ericsson spent $5 billion on research and development in 2011 and made a net gain of 6.2 billion kronor ($937 million) from licensing the technology to other companies last year, Kasim Alfalahi, Ericsson’s head of intellectual property, said today in a phone interview.

Ericsson has “demanded prohibitively higher royalty rates to renew the same patent portfolio,” Samsung said in a separate statement today. “As we cannot accept such extreme demands, we will take all necessary legal measures to protect against Ericsson’s excessive claims.”

Ericsson shares rose 0.1 percent to 59.9 kronor at 12:02 p.m. in Stockholm trading, underperforming Sweden’s benchmark OMX Stockholm 30, which was up 0.2 percent.

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