Ericsson, Apple to cooperate in wireless technologies in patent deal, litigation settlement

Good news for Ericsson and Apple, not so good news for the army of lawyers to whom patent litigation is a never-ending source of vast amounts of cash.

Swedish mobile telecom gear maker Ericsson announced it had signed a patent licence deal with Apple Inc, ending a year-long dispute and sending its shares up 7 per cent on Monday. Rather than prolong the legal wrangling, though, Apple has come to an arrangement with Ericsoon, and the lawsuits have been dropped. The seven-year agreement will see Apple make an initial payment to Ericsson, and then pay ongoing royalties. The exact figures for the settlement remain undisclosed, but it’s likely to be a hefty chunk of change for Apple whatever way you cut it.

Including positive effects from the settlement and its ongoing intellectual property business with other licensees, Ericsson estimates its full-year revenues from licensing at SEK 13-14 billion in 2015.

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.

“In addition, the agreement… solves all disputes related to violations of patents between the companies”, the statement added. 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 two companies will now collaborate in multiple technology areas, including 5G development, video network traffic management, and wireless network optimisation.

Back in February, Ericsson filed suits in many different jurisdictions for patent infringement (the International Trade Commission, the U.S. District Court for the Eastern District of Texas, the U.S. District Court for the Northern District of California, as well as courts in the U.K., Germany and the Netherlands).