Ericsson, Apple Agree on New Multiyear Patent Deal, Ending Legal Battle — Update

By Dominic Chopping

STOCKHOLM–Ericsson AB said Friday it has reached a multiyear, global patent license agreement with Apple Inc., ending a yearlong legal battle over the use of Ericsson’s technology in products such as iPhones.

Ericsson shares moved higher on the news, rising 4% on the day, having traded slightly lower for most of the session.

Apple first licensed Ericsson’s patents in 2008 when it released the first iPhone. When that deal expired, a 2015 complaint by Ericsson against Apple led to another global cross-license deal between the companies, but those licenses expired after talks to renew the deal failed at the end of 2021.

Since then, the two companies have filed lawsuits against each other in several countries, all of which will now be dropped.

Ericsson had argued that following the expiration of the previous agreement, Apple was using their technology without a license and that the 5G licensing rate it had offered Apple was fair, reasonable and non-discriminatory. Apple then counter sued, claiming the Swedish company was using “strong-arm tactics” to renew patents.

Fallouts in the telecom industry aren’t uncommon, as so much technology is shared in communication equipment, and these most recent lawsuits are the latest in a line of spats between the companies as they argue over royalty payments.

With the rapid development of all-new technology to power 5G and the huge costs involved, developers are keen to ensure they recover costs via royalties when their technology is used by others. Ericsson spends more than $4 billion on research and development every year and has been granted more than 60,000 patents worldwide.

Ericsson said that in addition to Friday’s cross-license deal relating to patented cellular standard-essential technologies and certain other patent rights, the two companies will strengthen their technology and business collaboration, including in technology, interoperability and development standards.

The company didn’t disclose a value of the deal but said the agreement was backdated to Jan. 15, 2022, and in addition to existing deals with other licensees, it expects to report intellectual property licensing revenue of 5.5 billion to 6.0 billion Swedish kronor ($532.4 million-$580.8 million) in the fourth quarter of 2022.

Prior to Friday’s agreement, the Swedish company had expected to report intellectual property licensing revenue of SEK1.0 billion to SEK1.5 billion in the fourth quarter.

Write to Dominic Chopping at [email protected]

(END) Dow Jones Newswires

December 09, 2022 09:41 ET (14:41 GMT)

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