Ericsson filed a complaint on Thursday in the Eastern District of Texas against Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Research America, alleging that Samsung has breached its “fair, reasonable and non-discriminatory” (FRAND) terms and other commitments.
According to the complaint, “Ericsson develops infrastructure equipment that makes up up the backbone of modern networks; that is, the base stations and cell tower equipment that mobile phones communicate with,” and numerous mobile network operators buy services from Ericsson. As a result of its research and development efforts, Ericsson claimed it has been awarded “more than fifty-four thousand patents worldwide.” Ericsson noted that its patents are “essential to” 2G, 3G, 4G, and 5G “telecommunications standards, which are used by Samsung’s products.”
In the brief submitted to the court, Ericsson asserted that it grants licenses for its essential patents in order for various entities to use these standards on FRAND terms. Ericsson stated that it utilizes “a reciprocal license to a potential licensee’s Essential Patents to cover Ericsson’s cellular commitment.” The plaintiff noted that it has licensed its essential portfolios with many telecommunications industry members, who pay Ericsson royalties for a global portfolio license, and that Samsung has agreed to similar FRAND obligations, reported Law Street Media.
Ericsson and Samsung have previously entered into global cross-licenses, covering patents relating to 2G, 3G and 4G standards in 2014. The plaintiff claimed that in February 2019, before the cross-license expired, it initiated negotiations with Samsung for a new license, Law Street Media reported. Under this proposal for a global cross-license, each would license the other’s Essential Patents and “(b)oth Samsung and Ericsson understood that Samsung would owe Ericsson a substantial balancing payment as part of the cross-license…consistent with the value of Ericsson’s Essential Patents as compared to Samsung’s.”
Ericsson claimed that Samsung violated its FRAND commitment “by effectively depriving Ericsson of its right to a reciprocal license to Samsung’s Essential Patents on FRAND terms.” The company contends that Samsung has not satisfied its reciprocity obligations, failed to comply with FRAND commitments, and breached its duty to negotiate in good faith.