Ericsson and Samsung settle patent litigation with a licensing pact

After signing a global patent licensing agreement with Google, Samsung is once again entering into another licensing arrangement. However, in its settlement with Ericsson, however, Samsung is not really standing on equal ground.Ericsson might have somewhat dropped out of mainstream media when it bowed out of the mobile device race and separated from Sony. The company, however, remains one of the world's largest wireless network equipment manufacturer, and thus still holds a bit of its weight. It is almost impossible not to bump into it when it comes to wireless technology, a fact that Samsung is learning the hard way.

After failing to reach an amicable agreement regarding licensing fees, Ericsson filed a patent lawsuit in November 2012 in the Eastern District of Texas, the haven of such kind of litigation. It accused Samsung of continuing to use its technology without paying licensing fees which, according to it, were quite fair under the Fair, Reasonable, and Non-discriminatory principle or FRAND. Samsung claims otherwise and fought back by trying to get some Ericsson devices banned in the US.

After more than a year, the two parties have agreed to settle things out of court, though it looks like Ericsson emerges victorious, at least financially. Other than the usual global cross licensing of patents related to GSM, UMTS, and LTE technologies, Samsung will also be forking over royalty payments for the term of this multi-year agreement. Ericsson is expecting that this inflow of cash will boost its Q4 2013 sales by 4.2 billion SEK, or roughly $652 million, and its net income by 3.3 billion SEK or around $512 million.

The agreement stipulates that both sides will end all ongoing patent legal disputes but the two might yet meet again in patent court. Ericsson is part of the Rockstar consortium that last year sued Google and Samsung among other companies over several Nortel Network patents. It remains to be seen whether this settlement will have any effect on that ongoing lawsuit.

SOURCE: Ericsson