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Ericsson confident after Samsung fires back on patents

The Swedish flag flies outside Ericsson's headquarters in Stockholm April 30, 2009. REUTERS/Bob Strong
The Swedish flag flies outside Ericsson's headquarters in Stockholm April 30, 2009. REUTERS/Bob Strong

By Simon Johnson

STOCKHOLM (Reuters) - Swedish telecoms gear maker Ericsson said on Wednesday it was confident it would win a dispute over patents with Samsung after the Korean firm filed a counter-claim in a U.S. court.

Cut-throat competition between technology firms has spilled over into legal battles in recent years as companies like Apple fight for market share and to recoup more of the billions of dollars they spend on research and development.

Ericsson has sued Samsung for allegedly failing to sign license agreements on reasonable grounds to use its technology.

But Samsung fired back with a filing to the district court in Texas that it was being overcharged.

"Ericsson seeks to extract a usurious ransom that dwarfs the amounts paid by Samsung in two prior agreements (with Ericsson) as well as the payments made by any other Ericsson licensee," Samsung said in the court document.

Samsung also alleged Ericsson was infringing its patents in network technology, an area where the South Korean firm has been expanding, and which is the Swedish group's core market.

Ericsson said in an emailed statement to Reuters that it was aware of Samsung's move. "We are confident that the court will resolve the claims in our favor," it added.

With revenues squeezed by competition and a global downturn, Ericsson's intellectual property income, among the most extensive in the telecoms industry in recent years, has helped offset some of the 30 billion crowns ($4.66 billion) spent annually in research and development.

The Swedish company had patent revenues of 6.6 billion crowns in 2012, up from 6.2 billion the previous year and 4.6 billion in 2010. Total revenues for the whole of Ericsson's business topped 225 billion crowns last year.

The mobile telecoms industry relies on global standards that allow devices to communicate with each other regardless of which company manufactured them or through which network they pass.

That means rivals must agree on how much they pay to use each other's technology, creating fertile ground for dispute.

Samsung is also embroiled in a legal war with Apple in more than 20 disputes in 10 countries, with Apple alleging various Samsung smartphone and tablet products infringed its patents.

Florian Mueller, a blogger and technology patent expert, said it was unclear whether the Ericsson clash was sparked by Samsung's move into the networks business.

"If Ericsson is asking for a lot more (royalty) money per base station, it could be a strategic initiative to drive up their competitor's prices," he said.

Last year, Samsung won a deal to supply a 4G network to operator "3" in Britain, its first such contract in Europe.

($1 = 6.4615 Swedish crowns)

(Reporting by Simon Johnson; Editing by John Stonestreet and David Cowell)

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