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| Samsung Electronics' office in Seoul / Yonhap |
By Baek Byung-yeul
The escalating legal tussle between Samsung Electronics and Ericsson over patent infringements regarding network equipment technology is expected to be a long-running battle, as the Swedish telecom giant feels threatened by the Korean tech firm's fast-growing technological capability in the 5G market, according to a noted patent expert.
"Ericsson and Samsung were embroiled in a patent licensing dispute from late 2012 to early 2014. The agreement they struck then has now expired. This reminds me of the situation between Apple and Nokia, which also seem to have a need to go to court every time their agreement is up for renewal," Florian Mueller, who's best known for running the software patent blog FOSS Patents, told The Korea Times during a recent email interview.
The two companies have been in a legal tussle after they failed to agree on a new contract for an expired cross-licensing agreement.
In December, Ericsson filed a patent fee suit with a court in Texas demanding Samsung pay more royalties. The Swedish firm said Samsung hedged on its so-called FRAND commitments, which refers to a commitment from a patent holder to license the patent on fair, reasonable and non-discriminatory terms and conditions.
In response, Samsung filed a lawsuit with a Chinese court in Wuhan last month to determine a global royalty rate for Ericsson's 4G and 5G patents. Ericsson then filed a complaint with the U.S. International Trade Commission (USITC) seeking to ban imports of Samsung's cellular communications infrastructure systems; and as a counteraction, Samsung also lodged a complaint with the USITC in a bid to block imports of Ericsson's products.
Regarding why the two companies are embroiled in countersuits against each other, Mueller said, "several factors make the current situation a particularly difficult one to resolve."
He added, "Ericsson is a company in decline, thus increasingly reliant upon patent licensing revenues. But Samsung has been out-innovating Ericsson for a long time and particularly owns very valuable 5G patents."
Mueller added that Ericsson is known in the mobile industry for "aggressively seeking to be overcompensated for its own patents" and the Swedish company "may at the same time be underrating the value of Samsung's impressive portfolio."
Estimating how long the lawsuits them will drag on for, Mueller said the dispute "might last longer than the last one" because of the fact that "Samsung is becoming an ever more relevant player in the telecommunications infrastructure market."
"Huawei has been shut out of some key markets, but Samsung has open doors wherever it goes, making the Korean electronics giant a formidable challenge to Ericsson and Nokia. I don't doubt that they will settle sooner or later, but later appears more probable right now than sooner," he said.
After Huawei slowed its installation of 5G base stations after the U.S. broadened its sanctions on the Chinese company, Ericsson, Nokia, ZTE and Samsung are fiercely competing with each other to fill the market void.
According to data provided by U.S.-based market tracker Dell'Oro, Huawei had a 43.7 percent share in the global 5G network market in the second quarter of 2020, but the figure plunged to 32.8 percent in the third quarter. During the same period, Ericsson's share increased to 30.7 percent from 20.7 percent while Samsung's portion dropped to 6.4 percent from 7.5 percent.
With market leader Huawei struggling with sanctions imposed by the U.S., Samsung has been constantly working on improving its market share. The company has especially focused on the burgeoning 5G network market in North America.
On Jan. 22, the company said its 5G base stations received a Common Criteria (CC) certification in the U.S. and Canada ― it also earned authorization from the U.S. National Information Assurance Partnership for its 5G network base stations this month.
Chong So-hyong, senior vice president and head of software development and networks business at Samsung, said winning the certifications was meaningful for Samsung, as providing reliable and secure products is essential to help safeguard network operators' 5G networks.
Given the company has earned a variety of security certifications, it is expected to expand its 5G network equipment business in North America. Last September, Samsung announced a deal with U.S. mobile carrier Verizon to provide 5G network equipment worth $6.7 billion.
Samsung has been expanding its foothold in the global network equipment market, supplying products to major countries such as Korea, Japan, Canada, the U.S. and New Zealand, which are heavily investing in the latest network technology.
