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© mariusz-szachowski-dreamstime.com Components | January 27, 2014

Samsung and Ericsson settle patent dispute

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

Ericsson is committed to licensing its standard-essential patents on fair, reasonable and non-discriminatory (FRAND) terms for the benefit of the industry.

"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 at 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."

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

Financial impact

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 billion (roughly USD 651 million) and SEK 3.3 billion (roughly USD 512 million) 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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