Samsung Escalates Ericsson 5G Royalty Fight With U.S. Trade Case

An engineer speaks on a radio device during the installation of Ericsson AB 5G apparatus to a Swisscom AG telecommunication network mast in Hindelbank, Switzerland, on Wednesday, Dec. 18, 2019. The multiplicity of services 5G is poised to offer -- extending beyond enhanced mobile broadband to encompass mission-critical control and massive internet of things connectivity -- sets this new mobile technology apart from the past. Photographer: Stefan Wermuth/Bloomberg

(Bloomberg) -- Samsung Electronics Co. filed a complaint seeking to block U.S. imports of Ericsson 5G networking equipment, ramping up pressure as the two companies fight over the renewal of a patent-licensing agreement.

Samsung, based in Suwon, South Korea, claims Ericsson base stations that connect mobile-phone users to a network rely on Samsung’s patented inventions, according to the complaint filed Thursday at the International Trade Commission in Washington. A week ago, Stockholm-based Ericsson filed its own ITC case, seeking to block imports of Samsung phones, tablets and televisions.

Competing ITC cases in 2014 led to the companies reaching a cross-licensing agreement, and the new litigation is an effort to gain an edge after almost two years of talks have gone nowhere. The companies also are fighting over whether a court in Texas or one in Wuhan, China, would be the arbiter of rates for patents on inventions that are essential to 4G and 5G industry standards.

The Chinese court has issued an order that only it could set the rate on the standard-essential patents. A judge in Texas could rule by Monday on Ericsson’s request that would prevent Samsung from enforcing that order.

The two ITC cases are over patents that aren’t related to the industry standards, so aren’t affected by that dispute.

Mikaela Idermark, a spokeswoman for Ericsson, said the company is aware of the new complaint and “will fully review what has been filed before deciding on any further comment.”

Mutual Needs

Each company has patents that the other needs to license, but they can’t agree on how much. Ericsson says that on balance it’s owed money because it has more patents on how telecommunications work, while Samsung has more products using that technology.

An inability to reach a new licensing agreement with Samsung, which is the world’s largest smartphone maker, could dent Ericsson’s profits.

Samsung’s newest case is an effort to hit Ericsson’s bottom line. Ericsson gets about a third of its revenue from North America, according to data compiled by Bloomberg. Samsung said its own business of making base stations for the U.S. market is “in the process of being established,” and Ericsson’s use of its inventions is unfair.

Samsung also lodged patent-infringement claims against Ericsson in response to a new suit Ericsson filed Jan. 1.

The trade agency is a popular forum for patent disputes because it works more quickly than most courts. Final decisions are usually reached in about 15 months.

The new case is In the Matter of Certain Wireless Communications Equipment, 337-3522, U.S. International Trade Commission. The earlier cases are Ericsson v. Samsung, 20-380 and 21-1, both U.S. District Court for the Eastern District of Texas (Marshall), and In the Matter of Certain Electronic Devices with Wireless Connectivity, 337-3520, U.S. International Trade Commission (Washington).