If the courtroom dramas from tech companies in 2014 wasn’t enough, here comes the latest from technology giants Apple Inc. (AAPL) and Ericsson. Reportedly, both the companies are at logger heads over a patent royalty dispute. In the latest report by Bloomberg, Apple has charged Ericsson for demanding excessive royalties for its LTE wireless technology patents, which are not essential per the LTE standard. Both the companies have been working together under a licensing agreement signed in 2008.
According to reports, Apple charged the Swedish company for demanding royalties for licensing patents on the LTE technology as a percentage of the price of the smartphone or tablet. The iPhone maker believes that royalties should be based on the value of the processor chip that deploys the LTE technology.
Apple has filed a case in a federal court in California and expects the court to rule in its favor stating that the patents are not essential to LTE standards. However, if the ruling is in favor of Ericsson, Apple wants the court to come up with a reasonable royalty rate.
However, according to latest reports by Reuters, Ericsson has also filed a lawsuit in Texas contesting Apple’s claim and seeking legal intervention to decide the royalty rates on non-discriminatory terms.
Apart from Apple, Ericsson has been in patent infringement disputes with major smartphone makers. Last year, Samsung Electronics Co. settled with Ericsson, agreeing to pay $650 million along with years of royalties to end the legal battle. The company also sued Xiaomi Corp. in India over patent licensing.
Currently, Apple has a Zacks Rank #2 (Buy) and the company is expected to reports its first quarter fiscal 2015 on Jan 27, 2015. Other Stocks that carry Zacks Rank #2 include Borderfree, Inc. (BRDR), LivePerson Inc. (LPSN) and Qunar Cayman Islands Ltd. (QUNR)
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