Ericsson Files Lawsuit Against Samsung; Warns on Quarterly Income Hit of Up to $177 Million
December 11 2020 - 3:05AM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Ericsson AB on Friday filed a lawsuit against Samsung
Electronics Co. in the U.S. for violating contractual commitments,
and cautioned that delayed royalty payments and legal costs could
cost the company between 1 billion and 1.5 billion Swedish kronor
($118.1 million-$177.2 million) a quarter.
The telecommunications equipment vendor said it has filed a
lawsuit against Samsung in the U.S. District Court for the Eastern
District of Texas for violating contractual commitments to
negotiate in good faith and to license patents on Fair, Reasonable
and Non-Discriminatory (FRAND) terms and conditions.
"The case addresses breaches of FRAND obligations by Samsung and
seeks to obtain a ruling by the court that Ericsson has complied
with its own commitments," Ericsson said.
The FRAND system allows access to intellectual property,
developed by contributors like Ericsson, on FRAND terms and
conditions, and rewards contributors for their up-front investment
in research and development.
Ericsson added that it is in talks over several license renewals
which could lead to a delay in receiving intellectual property
royalties, though unpaid royalties are expected to be recovered
when talks conclude and the contracts are agreed.
"Current geopolitical conditions are impacting handset sales
volumes as is the shift from 4G to 5G handsets," Ericsson said.
"This, in combination with delayed royalty payments from
unlicensed periods and potential costs of litigation, may impact
Ericsson's operating income by SEK1 billion-SEK1.5 billion a
quarter beginning in the first quarter 2021."
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
December 11, 2020 02:50 ET (07:50 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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