Ericsson and Samsung Electronics announce patent deal to end legal disputes

Ericsson AB and Samsung Electronics Co. announced that they managed to settle their patent dispute and made a deal over wireless technology in smartphones, televisions, tablets and Blu-Ray disk players.

The agreement between the two companies is multi-year and cross-licensing, and relates to GSM, UMTS and LTE standards for networks and handsets. The contract is expected to increase the fourth-quarter sales of Ericsson by 4.2 billion kronor (652 million dollars) and increase the companys net income by 3.3 bullion kronor initially. The network maker made a statement today, explaining that the contract also includes continuing royalty payments to the company.

This agreement is the one that is considered to be able to end lawsuits at the International Trade Commission in the U.S. and appeared just as a judge was scheduled to release findings in one of the cases.

Kasin Alfalahi, who is the Chief Intellectual Property Officer of Ericsson, made a statement, cited by Bloomberg: “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 innovations to share their own ideas.”

The latest legal fight between Ericsson and Samsung Electronics began in November 2012 and was provoked by both companies inability to agree on terms to extend a licensing deal. Each accused the other of refusing to pay – or offer – a fair royalty rate. Six of the seven patents in the trial against Samsung cover technology thats standard throughout the entire industry. This is the reason why Ericsson pledged to license those patents on fair terms to any company. The company also said that Samsung was asked by it to pay a comparable rate, as is paid by hadset rivals Apple Inc., HTC Corp. and BlackBerry ltd.

Currently, Samsung Electronics is the largest smartphones and televisions manufacturer. The company is also one of the biggest recipients of patents in the U.S. and a frequent defendant in lawsuits by competitors and patent-licensing companies. Its way is marked by its global patent battle with its main competitor at smarphone market – Apple Inc.

According to Bloomberg, the current share price of Telefonaktiebolaget LM Ericsson is 2.47% up, and its one-year return rate is 14.83% up. According to Bloomberg, the current share price of Samsung Electronics Co. Ltd is 1.15% down, and its one-year return rate is 7.89% down.