Airvana sues Ericsson over femtocell technology

Airvana says Ericsson broke a contract it acquired along with Nortel's equipment business

Femtocell developer Airvana is charging Ericsson with breaching their contract over femtocell technology, in a lawsuit filed in the Supreme Court of the State of New York.

Femtocells like those Airvana developed extend capacity and coverage of mobile networks, which are under increasing strain. The market for such technologies has grown rapidly over the past few years as the use of mobile phones for both voice and data access has also grown.

The dispute has its roots in the bankruptcy of former telecommunication giant Nortel, according to Airvana, which is based in Chelmsford, Massachusetts.

Airvana began selling its products, including hardware and software, to Nortel in 2001, it said in the suit. Nortel, which resold the products to Verizon and Sprint, later struck a deal to make the hardware itself, based on Airvana's designs, while relying on Airvana to supply the software. The contract said that Nortel couldn't use software other than Airvana's in conjunction with the hardware, the suit alleged.

But then Nortel began its long slide into bankruptcy, and in 2009, the Swedish telecom equipment vendor Ericsson bought Nortel's North American equipment business. It also acquired Nortel's contract with Airvana, according to the suit.

Shortly thereafter, Ericsson began pressuring Airvana to reduce its software fees, the suit alleges. Relations between the companies began to sour, Airvana claims. Ericsson executives said that the original contract represented a "bad deal" for Nortel and that Airvana "needed to be taught a lesson," according to the suit.

Airvana alleged that Ericsson went on to develop its own software to run on hardware based on Airvana's designs, in violation of the contract, in order to avoid having to pay Airvana for its software. Late last year Ericsson informed Airvana that it planned to start selling the product with its own software.

Airvana is asking that Ericsson be prevented from using its own software in the products, which it said are based on Airvana's hardware designs. Airvana is also asking the court for US$330 million in damages related to revenue that Airvana lost by agreeing to reduce its software fees before it knew that Ericsson was developing its own software to replace Airvana's.

Ericsson has earned revenue of more than $2 billion since 2009 on the sale of products incorporating Airvana's technology, resulting in licensing revenue for Airvana of $200 million per year in 2010 and 2011, Airvana said.

Since Ericsson is Airvana's sole customer, if it stops paying Airvana, the company would be "in jeopardy," Airvana said in a statement about the suit.

Ericsson did not respond to a request for comment.

Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Nancy Gohring

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers


This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang


It really doesn’t get more “gaming laptop” than this.

Jack Jeffries


As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr


The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?