Apple to pay Ericsson patent royalties on iPhones and iPads

23 Dec 2015 | Author: | No comments yet »

Apple will pay Ericsson patent royalties on iPhones and iPads.

Ericsson owns patents that it considers essential to the implementation of a number of mobile communications standards, including GSM, the 3G standard UMTS and LTE, used in 4G networks. The specific terms of the contract are confidential but news of the deal sent the Swedish network-equipment vendor’s shares 7% higher in early trading Monday.Stockholm: Swedish telecoms giant Ericsson has reached a global licensing agreement with Apple that settles several earlier patent disputes between the two companies, Ericsson announced on Monday.

While it has licensing agreements with other manufacturers of devices operating on these networks, a deal with Apple expired at the start of this year. The dispute between the world’s largest maker of wireless network technology and Apple highlights the complex corporate relationships in the telecom sector, where standardization of technologies and increased penetration of smartphones rely on sharing research and development globally. District Court for the Eastern District of Texas, Apple claiming that it did not infringe one of the key patents at issue, and Ericsson that Apple owed it for licenses for its entire standards-essential patent portfolio.

While Ericsson no longer makes mobile phones, it remains a leading manufacturer of equipment for mobile networks, and has more than 35,000 technology patents and 100 patent-licensing agreements worldwide. The Swedish company said in February the patents concerned the technology in older and current-generation mobile systems, as well as for features like live streaming of television shows and accessing apps on phones.

Including the positive effects of the settlement and the continuing intellectual property rights business with all other licensees, Ericsson estimates its full-year 2015 intellectual property rights revenue will be in the range of 13 billion kronor to 14 billion kronor. Apple filed a legal complaint in January against Ericsson, claiming the patents were not up to industry standards and that the Swedish group had asked for excessive royalties for them in its licensing renewal offer. The confidential agreement ends all ongoing patent-infringement claims between them, including the Texas cases and other disputes in California, the U.K., Germany and the Netherlands, they said. In comparison, it reported IPR revenue of 10.6 billion krona for the full year 2014, including a 4.2 billion krona lump sum in settlement of a similar global dispute with Samsung Electronics. Days later, Ericsson filed a complaint in another U.S. court requesting a ruling that its proposed global licensing terms with Apple were fair and reasonable.

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