Apple is currently involved in a legal dispute with Sweden-based tech giant Ericsson. The issue at heart is over royalty payments for using 5G wireless patents in iPhones. Here we explain what the big legal fight between the two giants is all about:
What is the issue between Apple and Ericsson?
Back in 2015, Apple and Ericsson had signed a licensing contract over telecom patents. The contract ended in 2022 and Apple reportedly didn’t renew the licenses. All devices require licensing a patent which is known as Standards-Essential Patent (SEP). A global agreement exists that the licenses for such patents must be under FRAND terms — which means fair, reasonable and non-discriminatory. What this ensures is that the price is reasonable and no company is allowed to charge one company more than another one. Apple was licensing a number of SEPs that were owned by Ericsson. Not just that but it was also licensing other patents that aren’t SEPs. Apple allegedly wanted to negotiate a lesser fee when the license expired.
When did the whole fight start
Ericsson first sued Apple in October making it clear that it was unhappy about Apple cutting down the royalty fees. Apple responded with a suit of its own in December where it accused Ericsson of using strong-arm tactics in order to get the patents renewed. An Ericsson spokesman, as per a Reuters report, said, “Since the prior agreement has expired, and we have been unable to reach agreement on the terms and scope of a new license, Apple is now using our technology without a license”.
What’s at stake in the legal battle?
Initially, Ericsson had sued Apple in the US and one more European country. However, now it has filed lawsuits against Apple in Netherlands, Brazil and Germany. Ericsson is arguing that Apple has violated its patents around 4G and 5G tech which is used in most iPhones. Apple has also alleged that Ericsson has infringed on its patents and is looking for a ban on imports of technology based on those patents. Ericsson may be looking for a ban on imports of iPhones as it alleges patent infringement by Apple.
What happens next
Since the licensing contract between the two companies hasn’t been renewed and lawsuits are being filed across continents, it could be a long-drawn battle. Notably, Ericsson had a long-standing legal dispute with Samsung as well over global patent licenses. The issue was settled last year in May 2021 but after a lengthy legal battle.