A licensing disagreement between GSM phone maker Sendo Holdings plc and wireless technology giant L.M. Ericsson has blossomed into a full-blown legal battle, with Sendo arguing that Ericsson and the European Telecommunications Standards Institute are conspiring to limit competition in the wireless market.
Ericsson said it filed suit against Sendo in several European countries for infringing on its patents for GSM and GPRS products. Ericsson said it offers “fair and reasonable terms” for the licensing of those patents, and that most of the world’s GSM and GPRS phone manufacturers have already joined its patent-licensing program.
“Basically, all we ask is that companies who use technology invented by Ericsson compensate us for this, the same way we are prepared to compensate others for our use of their technology,” said Kasim Alfalahi, Ericsson’s vice president of patent licensing. “We believe that Sendo is using Ericsson patented technology, but they have so far not signed a license agreement with Ericsson. Under these circumstances we have no choice but to take Sendo to court.”
Sendo, however, countered with documents filed with the European Competition Commission that allege the ETSI and intellectual property owners, including Ericsson, are engaging in “anti-competitive behavior” and are abusing the licensing system.
“Sendo considers that Ericsson and others are misusing ETSI and its licensing regime and in fact are operating under the cloak of a cartel between Ericsson and others whose object is to limit third-party competition, and generally control and manipulate technical and commercial progress to their own ends, in a manner entirely contrary to what ETSI was seeking to achieve and contrary to the stated objectives of the European Commission,” Sendo said in a statement.
“Sendo believes strongly in the principles that the members of ETSI have agreed upon,” said Hugh Brogan, Sendo’s chief executive officer. “This issue affects the entire industry, and the promotion of free competition can only create a healthy industry and ultimately benefit the consumer.”
Founded in 1999, Sendo is one of the few startup companies that has managed to break into the mobile-phone market, where initial launch costs and fierce competition have kept out all but the world’s biggest electronics manufacturers. However, Sendo has faced its share of challenges; the company has largely failed to break into the U.S. wireless market.
Further, licensing disagreements are part and parcel of the worldwide wireless market. Indeed, technology company InterDigital Communications Corp. has fought companies including Nokia Corp., Sony Ericsson, Ericsson and others over patent licensing issues.
Just last year, Sendo settled a lawsuit with Microsoft Corp., which had a stake in the U.K. company but surrendered it as terms of the settlement.
