Ericsson takes action for fair and reasonable patent licensing


STOCKHOLM, SWEDEN--(Marketwire - Nov 27, 2012) -

* Ericsson has filed a patent infringement action against Samsung afterit refused to sign a license agreement on FRAND (Fair, Reasonable andNon-Discriminatory) terms, despite two years of negotiations

* Ericsson believes it must take action to support a crucial system fortechnology sharing that has helped create today's mass marketcommunications industry

Ericsson (NASDAQ: ERIC) has today filed a lawsuit in the United StatesagainstSamsung for infringing its patents, after nearly two years of negotiationsfailed to reach an agreement.

The dispute concerns both Ericsson's patented technology that is essentialtoseveral telecommunications and networking standards used by Samsung'sproductsas well as other of Ericsson's patented inventions that are frequentlyimplemented in wireless and consumer electronics products. Ericsson hasconcluded that it has no option other than legal action after negotiationshavenot been successful since Samsung has refused to take a license on FRANDterms.

Ericsson helped to create the mobile telephone system by contributinghundredsof its inventions to the standard in exchange for a fair royalty. To date,Ericsson has signed more than 100 license agreements with all major playersinthe industry.

In 2011 alone, Ericsson spent SEK 32.6 b. (USD 5.0 b.) on research anddevelopment. This has resulted in hundreds of patented inventions that areessential to the standards that drive global communications, such as GSM,GPRS,EDGE, WCDMA, LTE and 802.11 as well as many other patented inventions thatarewidely implemented in most popular wireless and consumer electronicsproducts.Ericsson holds one of the strongest patent portfolios in the industry withmorethan 30,000 patents worldwide.

Ericsson is committed to licensing its standard-essential patents on Fair,Reasonable and Non-Discriminatory (FRAND) terms for the benefit of theindustry.It believes that FRAND licensing strikes the appropriate balance betweenincentivizing companies to contribute technology to open standards andmaintaining the overall royalty rates at a reasonable level to allow newentrants access to the market.

"By the end of 2012 there will be approximately 6.6 billion mobilesubscriptionsin the world. The sharing of technology in the telecom industry is one ofthemain drivers behind this development. The telecom ecosystem builds on fairandreasonable terms that have created an attractive global mass market formobilityand broadband with Ericsson as a main contributor", says Kasim Alfalahi,ChiefIntellectual Property Officer at Ericsson.

The rapid growth of mobile devices and subscriptions is driven by strongR&Dinvestments and sharing of technology by leading industry players such asEricsson.

Other companies that wish to use technology invented by Ericsson need alicenseto do so. These license agreements have helped create today's highlysuccessfulglobal communications industry by driving scale and creating low barriersofentry to new players.

The industry's eco-system functions on mutual respect and shared commercialinterests. Ericsson is fully committed to supporting this system and thebasisof trust that underlies it.

Legal background

Despite nearly two years of negotiations involving the most seniormanagement ofboth companies, Samsung refused to renew its license to Ericsson's industryleading portfolio of telecommunications patents on the same ("FRAND") termsthatits competitors have previously accepted.

Samsung previously licensed Ericsson's patents in 2001 and renewed in 2007,butits license has now expired. Ericsson has extended an offer to Samsung torenewthe license during negotiations that have lasted nearly two years. Thesenegotiations have not been successful since Samsung has refused to take alicense on FRAND terms.

"Ericsson has over 30,000 patents and more than 100 license agreements withallmajor players in the industry. Ericsson has tried long and hard to amicablycometo an agreement with Samsung and to sign a license agreement on FRANDterms. Wehave turned to litigation as a last resort," Mr Alfalahi said.

The complaint is filed in the District Court for the Eastern District ofTexas,USA, which is the district where Ericsson's US headquarters is located.


Photos of Kasim Alfalahi attached

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Ericsson is the world's leading provider of communications technology andservices. We are enabling the Networked Society with efficient real-timesolutions that allow us all to study, work and live our lives more freely,insustainable societies around the world.

Our offering comprises services, software and infrastructure withinInformationand Communications Technology for telecom operators and other industries.Todaymore than 40 percent of the world's mobile traffic goes through Ericssonnetworks and we support customers' networks servicing more than 2.5 billionsubscribers.

We operate in 180 countries and employ more than 100,000 people. Founded in1876, Ericsson is headquartered in Stockholm, Sweden. In 2011 the company'snetsales were SEK 226.9 billion (USD 35.0 billion). Ericsson is listed onNASDAQOMX, Stockholm and NASDAQ, New York stock exchanges.

Kasim Alfalahi Photo 1:

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Ericsson takes action for fair and reasonable patent licensing (pdf):

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