Ericsson is seeking to ban the import of iPhones, and Apple wants to ban the import of mobile base stations. The Cupertino company is said to be so afraid of this that it is making an “astounding” U-turn in the way it wants the dispute to be settled …
Manufacturing any mobile device requires the use of patented technology. If you literally cannot make a device without licensing a patent, this is known as a Standards-Essential Patent (SEP). There is a global agreement that licenses for these patents must be available on FRAND terms: fair, reasonable, and non-discriminatory. In other words, the price asked must be appropriate, and you’re not allowed to charge one company more than another one.
Ericsson owns a number of SEPs, which Apple was licensing, alongside other patents that don’t qualify as standards-essential. However, Apple did not renew its licenses when they expired, and we learned yesterday that Ericsson was therefore suing Apple for patent infringement.
Apple countersues Ericsson
Apple also owns some SEPs, and is now countersuing Ericsson for infringing these patents. Foss Patents says Apple has cited three patents relating to wireless charging and antennas, alleging that Ericsson mobile base stations infringe these patents.
These are the asserted patents, two of which are from the same family and all three of which are related to millimeter wave (mmWave) technology:
What’s interesting is that the site’s Florian Mueller notes that Apple has never before accused Ericsson or anyone else of infringing these patents.
Apple has not previously asserted these patents in litigation. Since the days of “thermonuclear war” on Android, Apple has been purely defensive. Presumably Apple will also bring or has already brought a companion complaint against Ericsson in federal court, but I haven’t found one on PACER yet. Also, I would expect Apple to countersue in some of the foreign jurisdictions (particularly in Europe) in which Ericsson has already filed infringement actions.
The rapid escalation of aggression has been described as reminiscent of the time that Apple cofounder Steve Jobs vowed to use patent lawsuits to engage in “thermonuclear war” with Android phone makers.
Mueller says that Apple’s motives are clear, and that the company makes no secret of these: It wants to pressure Ericsson into withdrawing its lawsuits.
Let’s take a look now at the following passage from Apple’s ITC complaint against Ericsson:
“[Ericsson] recently filed a series of lawsuits and legal actions around the world, despite the pending Apple Inc. v. Telefonaktiebolaget LM Ericsson, No. 2:21-cv-00460-JRG (E.D. Tex. Dec. 17, 2021) matter that provides a global resolution of the parties’ dispute, which Apple was under the impression that Ericsson accepted. [Ericsson’s] actions in the United States and around the world demonstrate that they do not want a Court setting fair, reasonable, and non-discriminatory (‘FRAND’) terms for their patents. By way of such actions, [the Ericsson entities] are improperly using their purported standard essential patents (‘SEPs’) and non-standard essential patents (‘NEPs’) as ammunition through injunctions to coerce Apple to take an unfair, unreasonable, and discriminatory license to their purported SEPs. To the extent [the Ericsson entities] are willing to withdraw all of their lawsuits and legal actions, Apple is willing to do the same. However, if [the Ericsson entities] are not willing to agree to having the Texas court determine the FRAND terms for a cross license, Apple is forced to respond to Respondents’ infringement of Apple’s patents.” (emphasis added)
Apple makes “astounding” U-turn
Mueller says that Apple’s position here isn’t logical, because it wants to settle both SEPs and non-essential patents through a FRAND agreement – but FRAND terms only apply to SEPs.
Additionally, he says it is “astounding” that Apple wants everything to be resolved in the Eastern District of Texas – a jurisdiction that the company has wanted to avoid at all costs in the past because it is known to favor patent owners.
Indeed, Apple went as far as closing two Apple Stores there so to reduce the risk of cases against it being heard in the district!
Nevertheless, it is interesting–if not astounding–that Apple would like the global rate to be set in the Eastern District of Texas:
Just last year, scored a major rate-setting victory in a case originating from E.D. Tex. and unsuccessfully appealed by Ericsson’s adversary in that case, HTC, to the United States Court of Appeals for the Fifth Circuit. I wrote at the time that SEP royalties were set to rise as a result of that landmark ruling. Apple must be very afraid of jurisdictions like Germany that it thinks it can get a better deal in the Eastern District of Texas.
What makes Apple’s newfound love of the Eastern District of Texas–a district that has a hard-earned reputation for being sympathetic to patent holders–look like hell freezing over is that Apple is normally so very afraid of being sued there that–in order to have a stronger position to deny having much of a connection with that district–Apple even closed its last Apple Store in that district and moved it to a location just a stone’s throw away from its boundary. Over and over again, when it was sued in the Eastern District of Texas, Apple asked for cases to be transferred to the Northern District of California.
Mueller says Apple must be more afraid of courts in other countries, especially the prospect of import bans, than it is of the Eastern District of Texas. A global agreement would render the company safe from import and sale bans, like the ones it has previously faced in China and Germany.
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