Ericsson and Samsung Electronics Co strike new licensing deal to settle patent row

January 27
7:57 AM 2014

Ericsson AB and Samsung Electronics Co decided to end their patent war by agreeing to a new licensing deal concerning wireless technology involving smartphones, tablets, televisions and Blu-Ray disk players, Bloomberg reported.

The multi-year, cross-licensing deal covers GSM,UMTS and LTE standards for networks and handsets. In a statement, Stockholm-based Ericsson said the agreement will increase its sales for the fourth quarter by SEK 4.2 billion or $652 million and will also initially improve its net income by $3.3 billion. The deal also covers continuing royalty payments to be made to Ericsson.

The pact will put an end to the cases filed at the US International Trade Commission. It also came just as a judge was set to give a decision in one of the lawsuits. The two firms have taken to court before in order to get the advantage in talks about royalties in some of the most basic technologies utilized in modern-day electronics. In 2007, the two firms came to a deal after over a year of legal wrangling in US and European courts. The agreement allowed each one access to the patents of the other and Samsung giving Ericsson payments.

In a statement about the deal, Ericsson's Chief Intellectual Property Officer Kasim Alfalahi, "We are pleased that we could reach a mutually fair and reasonable agreement with Samsung. 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."

The most recent legal battle between the two firms started when they were not able to reach on the terms to extend a licensing agreement in November 2012. Both firms accused the other of not agreeing to pay or give royalty rate that's fair, the report said.

A lot of the matters at issue between the two firms focused on technology utilized by various devices.These include ways to save bandwidth in wireless communication, enhance network access and the capacity to still have a signal even while in a moving vehicle, the report said.

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