Opinion ID: 4461580
Heading Depth: 2
Heading Rank: 1

Heading: Ericsson’s Proposed License Offers to TCL

Text: The court ordered the parties to provide contentions defining the contents of a FRAND license. J.A. 131713. In response, Ericsson proposed two alternative license offers, “Option A” and “Option B,” in its contentions. J.A. 2718– 78; J.A. 4795–857. Eventually, the court ruled that the FRAND determination would be made in reference to Ericsson’s Option A and B offers. J.A. 38768–70. Option A proposed a lump-sum payment with percentage running royalties. Under Option A for mobile phones, TCL would make an annual payment of $30 million for its first $3 billion in sales, with percentage running royalty rates for additional sales. These running royalty rates were 0.8% of the net selling price for phones with 2G GSM/GPRS, 1.1% for phones with 2G EDGE, 1.5% for 3G devices, and 2.0% for 4G devices. Option B proposed only running royalties with caps and floors. Under Option B for mobile phones, TCL would pay percentage running rates as follows: 0.8% of the net selling price of 2G/GSM/GPRS, 1.0% for 2G EDGE, 1.2% for 3G, and 1.5% for 4G with a $2.00 floor and a $4.50 cap. In both options, Ericsson proposed a “release payment” for “TCL’s past unlicensed sales.” J.A. 33. Both parties agreed that the release payment would be part of the courtordered FRAND license. J.A. 131911.