Samsung has reached a new agreement to license Ericsson technology, putting an end to the litigation started between the companies in 2012. The cross-license agreement covers patents relating to GSM, UMTS and LTE standards for both networks and handsets.
The agreement ends complaints made by the companies against each other before the International Trade Commission as well as the lawsuits before the US District Court for the Eastern District of Texas. Ericsson initiated the suits after it failed to reach a new licensing agreement after two years of negotiations with Samsung, and Samsung subsequently counter-sued.
The new licence agreement includes an initial payment and ongoing royalty payments from Samsung to Ericsson. The initial payment will add SEK 4.2 billion to Ericsson sales and SEK 3.3 billion to its net profit for the fourth quarter of 2013. Ericsson also expects the initial payment to impact its operating cash flow in the beginning of 2014. Further details of the agreement were not disclosed.
This is Samsung's third major licensing deal in recent weeks, after Nokia earlier announced a new five-year arrangement with the company, and Samsung renewed its agreement with Google. Samsung is under investigation by the European Commission for its patent licensing practices, which the company is accused of using to hold back competition. It has proposed new licensing methods to the EC to improve access to standards-essential patents and curb litigation in the sector. The EC is still considering Samsung's commitments as part of a possible settlement of the competition case.
