Ericsson and Apple Sign Deal and End Patent Dispute
Written by Fozia Cheychi on 21 December 2015« Return to Reading Room
Swedish Telecom maker Ericsson has announced that it has signed a patent license with Apple Inc and thus bringing to an end pending lawsuits in the UK, US, Germany and The Netherlands. The news sent Ericsson’s shares soaring 7%.
Ericsson had filed lawsuits in a number of countries including the UK and Germany over the unlicensed use of its technology in iPhones and other wireless devices. Earlier this year in January, Ericsson said in its filing to a U.S. District that Apple’s licence to use the technology developed by the Swedish firm had expired, and that two years of negotiations had not resulted in a new deal.
As part of a seven-year agreement, Apple will make an initial payment to the Swedish group and then pay royalties.
The exact terms of the agreement are confidential, but it is estimated that the US giant will pay 0.5% of the revenue it receives from the sale of its Smartphone’s and tablets.
An Apple spokesperson in Europe had no immediate comment regarding the agreement.
The chief intellectual property officer at Ericsson- Kasim Alfalahi commented: “We are pleased with this new agreement with Apple, which clears the way for both companies to continue to focus on bringing new technologies to the global market, and opens up for more join business opportunities in the future.”
Hans Vestberg, chief executive of Ericsson, added that the settlement showed that Ericsson was making good use of its patent portfolio. He further commented that the process to strike a deal with Apple had proved “cumbersome” but said that he was “satisfied” with the results of the legal action.
While it no longer makes mobile devices, Ericsson expects to generate as much as £1.1bn from intellectual property rights this year, compared to the £770m it made in 2014. The company has more than 35,000 global patents licensed to numerous companies that allow them to make handsets.
Under the deal, both businesses are set to co-operate more closely in the future, specifically on developing 5G radio network and video traffic optimisation.
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