Apple swallows 7 year mobile patent payments deal from Ericsson

One lump sum or ongoing royalties, vicar? Both!

Sugarlumps_image_via_Shutterstock

Apple will pay Ericsson to use patented networking technologies employed by its iPhones and iPads, ending a year-long spat between the pair.

The fruity firm will cough up one lump sum royalty payment to the Swedish telecoms equipment giant, followed by on-going royalties for seven years under an agreement announced on Monday.

No public figure was put on how much Apple will actually hand over, but Ericsson estimated that its IP royalties business would make SKr 13-14bn (£1bn, or about $1.5bn) versus SKr 9.9bn (£776m, $1.15bn) in 2014.

The agreement closes all patent infringement litigation between the two companies. It also closes an investigation working its way thought the US International Trade Commission.

Ericsson’s cash pie is garnished with the standard cross-licensing agreements and language. For example, the settlement includes an agreement to cross-license GSM, UMTS and LTE technologies. The pair will collaborate in “multiple technology areas” including 5G development, video network traffic management and wireless network optimization.

Ericsson filed suit against Apple in the UK, the US, Germany and the Netherlands over Apple’s use in its devices of 2G, 3G and 4G/LTE standards, and of semi conductor components and non-cellular wireless communications. The firm reckoned it had tried to reach an agreement with Apple for up to two years.

Ericsson claims to have one of the industry’s strongest portfolios of intellectual property, with 35,000 patents granted worldwide. The firm had signed more than 100 patent licensing deals before firing off its lawsuits.

Samsung settled a similar action brought by Ericsson last year that saw the consumer giant fork over SKr3.3bn (£258m, $385m).

Kasim Alfalahi, Ericsson's chief intellectual property officer, said in a statement the agreement with Apple cleared the way for both companies to “continue to focus on bringing new technology to the global market, and opens up for more joint business opportunities in the future.” ®

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