Ericsson brings lawsuits against French smartphone maker as CIPO targets free riders

Ericsson filed patent infringement lawsuits in Mannheim and Dusseldorf on Monday against Wiko after, the Swedish telecoms giant claimed, four years of licensing negotiations had failed to produce a deal. The lawsuits accused Wiko of infringing ten patents that relate to 2G, 3G and 4G mobile technology and include a number of standard essential patents (SEPs).

The suits came amid what Ericsson chief IP officer Gustav Brismark described as an “increasing number of free riders in our industry who are unwilling to sign a licence”. He pointed to the success that relatively recent market entrants like Wiko have had as a sign of the strength of the mobile ecosystem but insisted that patent owners needed to see a return on their R&D.

“By sharing our technology we enable more and more consumers around the world to connect through different channels and we also provide opportunities for new start-ups to enter this ecosystem,” Brismark told the IAM blog. “This is proven by the success that Wiko has had in Europe in a fairly short timeframe. However, the system will only continue to work if all the players respect the basic rules of FRAND licensing.” He also claimed that with licensing negotiations between the two sides having begun in 2013, Wiko had adopted a strategy of delay rather than paying for a licence.

Wiko is a part of a band of device makers that have emerged in recent years such as China’s LeEco, Xiaomi and Oppo which have enjoyed rapid success but which are relative minnows in patent terms. Founded in 2011 the company is headquartered in France but is reported to be majority owned by Chinese business Tinno Mobile. While its worldwide sales are relatively small it has enjoyed notable success in France where it has been championed as a local player.

As with many disputes, these latest suits are most likely to settle before they reach court, but if they are litigated then they may add to a growing caseload of landmark FRAND licensing decisions coming out of Europe. Many in the licensing community are still digesting two highly significant cases from the High Court in London — between Unwired Planet and Huawei — and a 2015 decision from the Court of Justice of European Union (CJEU) — involving Huawei and ZTE — that have provided guidance on proposed SEP royalty rates and outlined the responsibilities for both sides in a licensing negotiation.

Brismark pointed to a number of helpful aspects from both of those cases including the CJEU’s finding that licensees are expected to engage in discussions without causing unnecessary delays and the High Court’s ruling that licensees should take a licence to a patent owner’s entire global portfolio. In a clear effort to mark itself out as a responsible licensor and bring greater transparency to the sector, Ericsson took the decision earlier this year to publish its expected royalty rates for 5G mobile technology.

The Swedish company’s litigation against Wiko comes as Apple and Qualcomm remain embroiled in an increasingly bitter licensing-related spat but Brismark rejected any notion that we were seeing a renewal of hostilities in the smartphone litigation wars. “I still remain hopeful that we will be able to conclude agreements in a friendly manner and that is our ambition,” he said. He characterised the smartphone wars as being about two giants of the mobile sector — Apple and Samsung — attempting to protect market share rather than as a dispute over standardisation and FRAND terms. The cases against Wiko, he said, were about, “Ericsson trying to protect our rights to maintain a level playing field in the market where the free riders don’t benefit compared to those who are paying for a licence”.  

Despite filing the cases against Wiko the Ericsson IP head claimed that he was actually quite optimistic about the licensing environment. “In the last two years I feel it’s been moving in a more positive direction but these things are so slow and everything we do is very long term so it’s hard to say anything unless you put it into a two or three year perspective,” he insisted.

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