Global telecommunications powerhouse, Ericsson, has initiated a legal move against Lenovo, including its subsidiary Motorola Mobility for what could be an infringement related to Ericsson’s 5G patents in 11 distinct lines of business.
With a claim spanning over a decade, Ericsson alleges that neither Lenovo nor Motorola could agree on the conditions of numerous license agreements, nevertheless, Lenovo persistently exploited Ericsson’s technology. Consequently, Ericsson arrived at a conclusion that both Lenovo and Motorola Mobility contravened patent law.
Back in 2008, Ericsson first brought this to Lenovo’s attention, alerting them that their range of products – individually including mobile phones, tablets, laptops, and personal computers – were exploiting Ericsson’s 2G and 3G intellectual property (IP).
By 2010, Ericsson extended an olive branch to Lenovo, proffering a cross-licensing agreement as a settlement. The deal proposed a reciprocation of IP licenses, having Lenovo remit a collective sum to Ericsson towards past and ongoing usage of the patents.
In an unexpected twist, Lenovo countered by requesting a waiver for backdated royalty fees that were due to Ericsson for unlicensed products already sold. A request of this magnitude was not palatable to Ericsson, causing a standoff that has been dragging along since then.
Balancing their portfolio anchored by a leading global position in 5G and fuelled by an average annual R&D investment of around $4 billion, Ericsson explained the importance of fair compensation through patent licensing to drive innovation.
Legal battles entailing patents are apparently an ordinary occurrence for Ericsson critics, courtesy of the hefty earnings reaped from patent licensing. An exemplification of this is Ericsson’s recently concluded 5G patent skirmish with Apple last year. This resolution forecasts an incremental credit into Ericsson’s account to the tune of an estimated $100 million per quarter.
The ripple effect of such victories is evident, spearheading a sharp uptick in Ericsson’s patent licensing revenues. A remarkable ascent from $132 million this time last year to a whopping $289 million, was recorded in this year’s second quarter.
