Ericsson drops cross claims in ipernica case

West Perth-based intellectual property company ipernica Ltd has had a tactical win its legal battle with international technology company Ericsson Inc, which has abandoned a series of cross claims.

ipernica, formerly QPSX Ltd, alleges Ericsson has not paid royalties on its use of the company's asynchronous transfer mode technology and segmentation and reassembly licence.

ipernica placed its expected royalites at five per cent of the company's global use of the product in the 2003-04 financial year, and three per cent for every year after that.

For its part, Ericsson made claims of misleading and deceptive conduct, misrepresentation, mistake, unjustified threats of patent infringement and other associated claims, and had raised the possibility of a patent invalidity claim.

Ericsson has been order to pay ipernica's costs in relation to the cross claims, according to an ipernica announcement.

Update on Ericsson case

ipernica ltd (ASX:IPR) provides the following update in respect of its case against Ericsson and others in the Federal Court of Australia.

The case concerns a licence agreement executed between ipernica (formerly QPSX) and Ericsson which provides for payment by Ericsson of royalties at a rate of 5% on Ericsson's global use of ATM Products for the first year from 1 July 2003 and 3% for subsequent years. The company is seeking damages for breaches of the licence agreement, as well as for misleading and deceptive conduct in contravention of the Trade Practices Act 1974 (Cth).

In October 2006, Ericsson sought and obtained leave to amend its defence and to bring a variety of cross claims against ipernica and one of its former managers. The Court delivered its reasons for its decision on this interlocutory issue on 31 October 2006. Ericsson's cross claims sought damages and other relief for alleged misleading and deceptive conduct, misrepresentation, mistake, unjustified threats of patent infringement and other associated claims, and raised the possibility of a patent invalidity claim.

At today's Case Management Conference, Ericsson formally abandoned all of these cross claims, and replaced its amended defence with a further defence which significantly narrows the issues in dispute.

Justice French made the following orders:

Cross Claims

In relation to Ericsson's cross claims against ipernica, Justice French:

• granted Ericsson leave to discontinue the cross claims; and
• ordered that Ericsson pay ipernica's costs thrown away by reason of the cross claims.

Substituted Defence

In relation to Ericsson's defence, Justice French:

• granted Ericsson leave to file and serve a substitute defence in the form filed with the Court today;
• ordered that Ericsson pay ipernica's costs thrown away by reason of the substituted defence; and
• granted ipernica leave to file any amended reply to Ericsson's substituted defence by 17 September 2007.

"We are very pleased that the case is again focussed on the contractual issues at the heart of this dispute" Mr Griffiths, ipernica Managing Director said. "We are also pleased to see that Ericsson's cross claims, which ipernica always opposed and considered to be without merit, have now been dropped by Ericsson."

The Case Management Conference has otherwise been adjourned to 21 September 2007.