Ericsson, ZTE patent charges underscore IPR value

ZTE Corp. said it will initiate “patent invalidation procedures” against Ericsson (ERIC), after the world’s largest infrastructure provider filed patent-infringement lawsuits against the Chinese vendor in three countries.
The patent dispute centers on handset and network patents related to GSM and W-CDMA technology. Ericsson said it had no choice but to file the lawsuit after negotiations between the companies have been stalled for years. Lawsuits were filed in Italy, the United Kingdom and Germany.
“For several years, Ericsson has made numerous attempts to sign license agreements with ZTE on fair, reasonable and non-discriminatory (FRAND) terms,” the company said. “Such attempts have unfortunately been unfruitful, and we have now, as a last resort, decided to exercise our legal rights to enforce our patents against ZTE’s infringing products,” the company said, noting it has signed licensing deals with more than 90 vendors.
ZTE, which said it plans to take its case to the patent re-examination board of China’s State Intellectual Property Organization, said it also has been able to reach cross-licensing agreements in most cases and seldom has to resort to third-party negotiations, let alone lawsuits.
Intellectual property rights (IPR) are the lifeblood of infrastructure, chip and device manufacturers, which spend billions developing new technology and can recoup research-and-development expenses through licensing the technology to competitors. However, because the financial stakes are so huge, companies look to the courts system if they feel they are not being paid fairly for their innovations. On the other hand, because patent dispute claims can take years to resolve, companies sometimes won’t level patent-infringement charges until the market or company has traction.
Patent lawsuits can take years to reach resolution. Qualcomm Inc. (QCOM) and Nokia Corp. (NOK) battled back and forth for two years before