Apple Urges Trade Agency to Reject Ericsson Patent Complaints

Apple Inc. urged a U.S. trade agency to reject Ericsson AB’s attempt to keep the iPhone out of the U.S. because of a fight over patent royalties.

Ericsson filed the two complaints with the U.S. International Trade Commission last month after licensing talks between the companies broke down. Ericsson, based in Stockholm, is asking the agency to block imports of Asia-made Apple products, including the iPhone, iPad and Mac computers.

“At bottom, Ericsson is using the threat of an exclusion order to coerce a large monetary payment from Apple,” lawyers for the Cupertino, California-based company said in a filing with the agency.

One of the two complaints relates to patented inventions that are part of industry standards for how mobile devices communicate. Apple has argued that there should be limits on patents for essential technology, and that patent owners shouldn’t be able to block others from using such inventions.

Any ban on the import of Apple products “would cause significant harm to competitive conditions in the U.S. economy, to the labor force, to consumers, and to a broad array of businesses, schools, state and local governments,” Apple told the agency. “This broad impact cannot be justified, particularly where the accused technology represents a minute portion of the functionality and cost of the subject products.”

Apple said that Ericsson should instead pursue its claims in a federal district court. Handling the matter in court, which can award money damages, reduces the threat to Apple of a possible sales ban.

License Renewal

Apple and Ericsson already have sued each other in district court -- Apple claims Ericsson wants too much money and Ericsson says Apple refuses to negotiate.

The trade agency’s power lies in its ability to block imports. Ericsson said it filed the complaints with the commission after Apple refused to renew a license that expired in mid-January. Ericsson claims Apple has even refused an offer to have an arbitrator determine the proper royalty rate.

The trade agency typically announces whether it has agreed to investigate a complaint about one month after it’s first filed. Investigations take about 15 to 18 months.

The cases are In the Matter of Certain Wireless Standard Compliant Electronic Devices, Complaint No. 3061; and In the Matter of Certain Electronic Devices, Complaint No. 3060, both U.S. International Trade Commission (Washington)

Before it's here, it's on the Bloomberg Terminal.