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Apple sues Ericsson to trim wireless patent royalty rates

Apple has filed suit against Ericsson for charging excessive royalty rates on certain wireless Long Term Evolution (LTE) technology, and argues that the Swedish company's patents are not essential to overarching industry standards.



In a complaint lodged with the U.S. District Court for the Northern District of California, Apple revealed that Ericsson is leaning on deemed standard essential IP to demand a percentage of the total price of every cellular-connected iPhone or iPad sold, reports Reuters.

"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," the complaint reads, as reported by Bloomberg.

Apple contends royalties should be based on the value of the component using the patented tech, such as baseband chips or application processors, which would come out to a fraction of what Ericsson is asking.

Barring an outright win, Apple has also requested the court instate a reasonable royalty rate if the company is found to infringe Ericsson's IP.

Ericsson has become increasingly aggressive in brandishing its batch of patents to milk royalties from major industry players like Samsung and Xiaomi, which use the IP across a range of devices. Most leveraged patents, including those related to Apple's case, are for wireless communications technology.

''We've always been willing to pay a fair price to secure the rights to standards essential patents covering technology in our products," said Apple spokeswoman Kristin Huguet. "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."

Apple currently licenses a number of Ericsson's standard-essential patents, but the deal was inked in 2008 and could be set to expire.

The redacted complaint did not reveal how much Ericsson is asking, but the number is likely substantial considering Apple's standing in the mobile phone space. For the third quarter of 2014, iPhone sales were north of 39 million units, only including one week of iPhone 6 and iPhone 6 Plus availability.