Apple and Ericsson battle it out over patent royalties

Apple and Ericsson battle it out over patent royalties

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$1 trillion value
Plenty of money's at stake in the latest lawsuit Apple is wrapped up in. Photo: Pierre Marcel/Flickr CC
Photo: Pierre Marcel/Flickr CC

Ericsson’s former CEO has gone on the record as saying his company should have taken the iPhone more seriously when it arrived back in 2007. Today, everyone takes the iPhone seriously — and there are the lawsuits to prove it.

In the latest of these, Apple and Ericsson are suing each other after failing to come to an agreement about the pricing of Ericsson-owned patents used by Apple.

Apple is claiming Ericsson is chasing excessive royalty rates, while Ericsson is holding out for more cash.

And when you’re talking about a handset like the iPhone 6, which sold upwards of 10 million units in its first weekend, who can blame it for trying?

“Ericsson seeks to exploit its patents to take the value of these cutting-edge Apple innovations, which resulted from years of hard work by Apple engineers and designers and billions of dollars of Apple research and development — and which have nothing to do with Ericsson’s patents,” Apple noted in its complaint.

Ericsson, meanwhile, is complaining to a district court in Texas, which it is asking for a verdict that its fees are fair.

The central disagreement in the lawsuit comes down to whether Apple should pay royalties based on the price of its entire device. Since Apple charges a premium for its devices, Ericsson wants more money — despite the fact that Apple points out that its higher price point relates to other features of its iOS devices, many which have nothing whatsoever to do with Ericsson.

“We’ve always been willing to pay a fair price to secure the rights to standards essential patents covering technology in our products,” Apple spokeswoman Kristin Huguet told Bloomberg. “Unfortunately, we have not been able to agree with Ericsson on a fair rate for their patents so, as a last resort, we are asking the courts for help.”