Ericsson and Samsung agree on patents

Ericsson and Samsung have reached an agreement on global patents relating to GSM, UMTS, and LTE standards for both networks and handsets between the two companies.

Ericsson is committed to licensing its standard-essential patents on fair, reasonable and non-discriminatory (FRAND) terms for the benefit of the industry. It believes that licensing according to FRAND principles strikes the appropriate balance between incentivizing companies to innovate and contribute technology to open standards and maintaining the overall royalty rates at a reasonable level to allow new entrants access to the market.

“We are pleased that we could reach a mutually fair and reasonable agreement with Samsung. We always viewed litigation as a last resort,” said Kasim Alfalahi, chief intellectual property officer, Ericsson.

“This agreement allows us to continue to focus on bringing new technology to the global market and provides an incentive to other innovators to share their own ideas,” added Alfalahi.

This agreement ends complaints made by both companies against each other before the International Trade Commission (ITC) as well as the lawsuits before the US District Court for the Eastern District of Texas.

The agreement includes an initial payment and ongoing royalty payments from Samsung to Ericsson for the term of the new multi-year license agreement.

The initial payment in the agreement will impact Ericsson sales and net income in Q4 2013 by SEK 4.2 bn and SEK 3.3 bn respectively. Ericsson expects that the initial payment in the agreement will impact Ericsson’s operating cash flow in the beginning of 2014.

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