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By Susan Decker and Tim Higgins
Feb. 27 — The licensing battle between Apple Inc. and Ericsson AB is escalating.
Ericsson, a pioneer in mobile phones that transformed itself into the world's largest maker of wireless networks, said Friday it's filing seven new lawsuits in a U.S. court and is asking the U.S. International Trade Commission to block Apple products from the U.S. market.
Together, the complaints accuse Apple of infringing as many as 41 patents for some of the fundamental ways mobile devices communicate and for related technology such as user interfaces, battery saving and the operating system.
“We have offered them a license; they have a turned it down,” said Kasim Alfalahi, Ericsson's chief intellectual property officer. “We're not a company that's planning to extract more than the value we put on the table.”
Apple had been paying royalties to Stockholm-based Ericsson before a license expired in mid-January. When talks over renewal failed, the companies sued each other, seeking court rulings on whether Ericsson's royalty demands on fundamental technology were fair and reasonable.
“We've always been willing to pay a fair price to secure the rights to standards essential patents covering technology in our products,” Kristin Huguet, an Apple spokeswoman, said in a statement. “Unfortunately, we have not been able to agree with Ericsson on a fair rate for their patents so, as a last resort, we are asking the courts for help.”
In its complaint against Ericsson in January, Apple said the price of today's electronics are driven by things like their design, operating system and touch capabilities that are unique to each product. Apple said Ericsson “seeks to exploit its patents to take the value of these cutting-edge Apple innovations” and accused the company of “abusive licensing practices.”
The new complaints being filed by Ericsson at the International Trade Commission in Washington take the dispute to another level and are designed to put pressure on Apple. The trade commission, whose job is to protect U.S. markets from unfair trade practices, moves more swiftly than district courts and has the power to block products from crossing the border.
Apple's iPhone, iPad and other devices are made in Asia.
Apple, based in Cupertino, Calif., has contended that companies whose patents cover fundamental technology are demanding too much money and has lobbied the courts, regulators and even a board that develops standards for Wi-Fi to have its position adopted widely.
The issue has split the technology industry between those who have created some of the basic ways phones operate and those that use the technology in complex devices.
Alfalahi declined to say how much Apple had been paying for the expired license. Only one of the seven lawsuits filed in federal court in Marshall, Texas, relate to standard-essential patents. Two of the Texas cases, including that one, are mirrors of the ITC actions and are likely to be put on hold while the trade agency investigates.
Ericsson offered to have an arbitrator determine the proper rates, while Apple refused to promise that it would abide by any decision, according to Alfalahi.
With assistance from Adam Ewing in Stockholm.
©2015 Bloomberg L.P. All rights reserved. Used with permission.
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