Ericsson Sues Apple in Europe Over Phone Patent Royalties

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Ericsson AB said it sued Apple Inc. in three countries as it ratcheted up a global licensing battle between the companies.

The suits in Germany, the U.K. and the Netherlands add to U.S. filings seeking a patent-licensing agreement for technologies fundamental to the way mobile devices communicate and for intellectual property related to user interfaces, batteries and operating systems. Apple continues to sell products globally without a license from Ericsson, the wireless-network maker said Friday.

“Everybody needs to take a license for the technologies we are providing to them,” Kasim Alfalahi, Ericsson’s chief intellectual property officer, said in a phone interview from the company’s Stockholm headquarters. “It’s a very serious thing, regardless of who the company is.”

Ericsson shares jumped as much as 6.3 percent and advanced 3.3 percent to 93.75 kronor at 4 p.m. in Stockholm, giving the company a market value of 309 billion kronor ($38 billion). Apples shares rose 1.4 percent to $126.97 in New York.

The issue has split the technology industry between those who have created some of the basic ways phones operate and those that use the technology in complex devices.

Apple had been paying royalties to Ericsson before a license expired in mid-January. When talks over renewal failed, the companies sued each other, seeking court rulings on whether Ericsson’s royalty demands on fundamental technology were fair and reasonable.

Fair Price

An Apple spokeswoman declined to comment on the matter and referred to a January statement that the company’s “always been willing to pay a fair price to secure the rights,” and that legal action was needed to help strike an agreement with Ericsson.

In its complaint against Ericsson in January, Apple said the price of today’s electronics are driven by things like design, operating system and touch capabilities that are unique to each product. Apple said Ericsson “seeks to exploit its patents to take the value of these cutting-edge Apple innovations” and accused the company of “abusive licensing practices.”

Ericsson offered to have an arbitrator determine the proper rates, while Apple refused to promise that it would abide by any decision, Alfalahi said.

While Apple’s iPhone and iPad have won over users in recent years, Ericsson helped pioneer the mobile-device market with its handsets in the 1990s. The company sold its mobile-phone business to Sony Corp. in February 2012, five years after Apple introduced the iPhone, which is now its largest revenue source.

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