Ericsson, Apple Agree on New Multiyear Patent Deal, Ending Legal Battle -- Update
December 09 2022 - 09:56AM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Ericsson AB said Friday it has reached a multiyear,
global patent license agreement with Apple Inc., ending a yearlong
legal battle over the use of Ericsson's technology in products such
Ericsson shares moved higher on the news, rising 4% on the day,
having traded slightly lower for most of the session.
Apple first licensed Ericsson's patents in 2008 when it released
the first iPhone. When that deal expired, a 2015 complaint by
Ericsson against Apple led to another global cross-license deal
between the companies, but those licenses expired after talks to
renew the deal at the end of 2021 failed.
Since then, the two companies have filed lawsuits against each
other in several countries, all of which will now be dropped.
Ericsson had argued that following the expiration of the
previous agreement, Apple was using their technology without a
license and that the 5G licensing rate it had offered Apple was
fair, reasonable and non-discriminatory. Apple then counter sued,
claiming the Swedish company was using "strong-arm tactics" to
Fallouts in the telecom industry aren't uncommon, as so much
technology is shared in communication equipment, and these most
recent lawsuits are the latest in a line of spats between the
companies as they argue over royalty payments.
With the rapid development of all-new technology to power 5G and
the huge costs involved, developers are keen to ensure they recoup
costs via royalties when their technology is used by others.
Ericsson spends more than $4 billion on research and development
every year and has been granted more than 60,000 patents
Ericsson said that in addition to Friday's cross-license deal
relating to patented cellular standard-essential technologies and
certain other patent rights, the two companies will strengthen
their technology and business collaboration, including in
technology, interoperability and standards development.
The company didn't disclose a value of the deal but said the
agreement is backdated to Jan. 15, 2022, and in addition to
existing deals with other licensees, it expects to report
intellectual property licensing revenue of 5.5 billion to 6.0
billion Swedish kronor ($532.4 million-$580.8 million) in the
fourth quarter of 2022.
Before Friday's agreement, the Swedish company had expected to
report intellectual property licensing revenue of SEK1.0 billion to
SEK1.5 billion in the fourth quarter.
Write to Dominic Chopping at email@example.com
(END) Dow Jones Newswires
December 09, 2022 09:41 ET (14:41 GMT)
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