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November 28, 2012

Ericsson Takes on Samsung with Allegations of Patent Infringement

By Steve Anderson, Contributing TMCnet Writer

With Apple (News - Alert) and Samsung's patent wars now settled on several fronts, though still nowhere near over, Samsung now has a new adversary to tackle in the patent wars. Samsung's newest opponent is Ericsson (News - Alert), who recently brought a patent infringement suit against Samsung following what was described as two years' worth of talks to establish a license agreement.

The patents at issue are ones of mobile networks, and Ericsson, who estimates that over 40 percent of the world's mobile traffic goes through its networks on one level or another, alleges that Samsung (News - Alert) is refusing to sign licenses on FRAND terms. FRAND here means “fair, reasonable and non-discriminatory”, and is commonly reserved for technologies that become so essential to the industry that they become used as standards in the field. Ericsson, holder of over 30,000 individual patents and over 100 license agreements, believes that Samsung is violating those patents in its own devices, especially those relating to both networking and telecommunications standards.

Image via Shutterstock

Samsung, meanwhile, said in response that, while it has “faithfully committed itself” to negotiations, the problem is on Ericsson's end, demanding increased royalty rates over the same patents. Samsung also plans to "take all necessary legal measures to protect against Ericsson's excessive claims."

It's not particularly difficult to see Samsung's side on this one, especially in light of the turnarounds in the market that Ericsson has endured as of late. While network traffic is up, and subscriber numbers are mounting—even Ericsson's own numbers project that, by 2018, nearly every second human on earth will have a subscription at 3.3 billion subscribers-- Ericsson's network unit sales have been dropping, losing fully 17 percent in the third quarter alone.

More subscribers, more network demand, and losses in sales add up to a bad picture overall, and explains reasonably well why Ericsson might be looking to the courts to secure income. Considering that just last August, Apple won a $1.05 billion jury verdict against Samsung, it could be seen that Ericsson is out to get some badly-needed extra cash, especially following reports that Ericsson spent fully $5 billion in 2011 on research and development of such standards as GSM and EDGE.

It's a difficult picture to immediately sort out, make no mistake. While Ericsson's sales losses do suggest an urgent need for cash—a need echoed by many firms throughout the soft economy—suggesting that Ericsson is engaging in a kind of minor patent trolling seems ludicrous on its face.

Of course, only a full trial will be able to tell for sure just which side of this particular matter is the right side, and it will likely take a good long while to figure out if Ericsson's overreaching, or if Samsung is trying to duck a reasonable bill.

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