Daily Management Review

Ending a Year Long Stalemate, Ericsson and Apple Sign Patent Deal


Ending a Year Long Stalemate, Ericsson and Apple Sign Patent Deal
Ending a year-long dispute, Swedish mobile telecom gear maker Ericsson announced it had signed a patent license deal with Apple Inc which send the shares of the Swedish company up by 7 percent on Monday.
It is estimated overall revenue from intellectual property rights in 2015 would hit 13 to 14 billion crowns ($1.52-$1.64 billion). Although Ericsson did not specify much details of the earnings, it is estimated that the earnings would include including positive effects from the settlement with Apple, up from 9.9 billion crowns in 2014. 
It believed the deal meant Apple would be charged around 0.5 percent of its revenue on iPads and iPhones by Ericsson, investment bank ABG Sundal Collier said in a note to clients.
The agreement was broad, covering the latest 4G-LTE generation of mobile technology, as well as the earlier 2G and 3G technologies, Ericsson Chief Intellectual Property Officer Kasim Alfalahi said.
"It means we can continue to work with Apple in areas such as 5G radio network and optimization of the network," Alfalahi said but declined to provide further financial details, reports new agency Reuters.
In January, in response to a lawsuit filed by the iPhone maker that month, Ericsson had filed a complaint against Apple over mobile technology license payments.
The U.S. firm Apple would have to pay it between 2-6 billion Swedish crowns annually, analysts had estimated, had the dispute with Apple went Ericsson's way. This figure was based on estimates of levels of handset sales and royalty payments per phone.
Apple did not immediately respond to a request for comment.
Implementation of a number of mobile communications standards, including GSM, the 3G standard UMTS and LTE, used in 4G networks would not be possible without the patented technology owned by the Swedish company, claimed Ericsson. A licensing deal with Apple expired at the start of this year even as Ericsson has licensing agreements with other manufacturers of devices operating on these networks.
Apple and Ericsson sued one another in the US District Court for Eastern District of Texas after negotiations to renew that deal between the two broke down. While Ericsson claimed that Apple owed it for licenses for its entire standards-essential patent portfolio, the US smart phone company claimed that it did not infringe one of the key patents at issue.
Just six weeks later, alleging that Apple infringed its patents on 2G, 3G and 4G network technologies, Ericsson returned to the Texas court with seven new lawsuits, and filed two others with the U.S. International Trade Commission. Ericsson appealed to the courts to block sales of the iPhone and iPad until Apple paid up.
Ultimately the two companies on Monday announced the signing a global cross-license agreement for patented standards-essential technologies.
All ongoing patent-infringement claims between the two companies were ended in the confidential agreement. The agreement also included the Texas cases and other disputes in California, the U.K., Germany and the Netherlands.
(Source:www.reuters.com & www.pcworld.com)