Ericsson has filed a lawsuit against Samsung in the United States, accusing the South Korean giant of not adhering to its contractual commitments for various licensing patent agreements. It claims that Samsung is failing to adhere to fair, reasonable, and non-discriminatory (FRAND) terms and conditions.
The company is seeking to attain a declaration that it has complied with its FRAND commitment and that Samsung has not. Ericsson claims that Samsung’s FRAND commitment is a contract between Samsung and European Telecommunications Standards Institute and it has the right to enforce this commitment as a third-party beneficiary.
For those who are unaware, several most common technological standards are protected by patents held by companies, including Wi-Fi and Bluetooth. Such technologies being essential, the patent holders are obliged to grant licenses on FRAND terms.
In this instance, the FRAND commitment is related to various global cross-licenses that cover patents from both the companies related to 2G, 3G, 4G, and 5G cellular standards. These standards are used in smartphones, other mobile devices, and cellular infrastructure.
With several of the licensing deals set to expire next year and negotiations still ongoing, Ericsson said the payment of IP royalties may be delayed. In such case, Ericsson predicted its operating income could decline by $118-177 million per quarter from 2021 onwards.