Apple share price up, sues Ericsson over wireless technology patents

Apple Inc and Swedens Ericsson are suing each other over royalties for patents covering wireless technology used in every iPhone and iPad.

According to a filing to the District Court for Northern California, Ericsson is seeking excessive royalties for its “Long Term Evolution”-related patents.

Apple claims that the Swedish company is demanding fees based on the total value of its devices, however, the royalties should be calculated on the value of the processing chip that uses the LTE technology, according to the Cupertino, California-based company.

A spokeswoman for Apple said that negotiations between the companies related to a “fair rate” of the LTE patents have failed and the iPhone maker was seeking court help as a last resort.

The US giant also argued that Ericsson patents are not essential to the industry. However, Apple has asked the court to set reasonable royalties rates, if the company was found in violation of Ericssons patents.

Meanwhile, Ericsson also filed a complaint against Apple. The Swedish company asked the US District Court for Eastern Texas to investigate and rule over whether the company has made “a fair, reasonable and non-discriminatory” offer over royalties.

“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,” Apple said.

Apple also claims that in 2008 the companies inked a license agreement that covers the majority of Ericssons patents. After the deal was signed Apple released the iPhone.

However, the Swedish company said that Apples license to its LTE-related patents has expired and the two companies have not yet reached an agreement to renew it, despite almost two years of negotiations.

Ericsson has proven to be highly aggressive when it comes to defending its patients. Last year it sued Xiaomi, after the Chinese company failed to license patents related to 2G, 3G and 4G wireless technology. In January 2014, Samsung agreed to pay 4.2 billion kronor to Ericsson in order to get a multi-year licensing deal.

Apple is also no stranger to patent-related lawsuits, in 2011 the iPhone maker lost a two-year long litigation and agreed to pay an undisclosed amount to Finlands Nokia.

Apple Inc gained 0.89% and closed at $110.22 on NASDAQ, marking a one-year increase of 44.02%. The company is valued at $640.73 billion. According to CNN Money, the 43 analysts offering 12-month price forecasts for Apple have a median target of $124.00, with a high estimate of $150.00 and a low estimate of $60.00. The median estimate represents a 12.50% increase from the last close price.