• Ericsson and Samsung have signed a multi-year patent license agreement for cellular technologies, including 5G.
  • In the second quarter of 2021, IPR licensing revenues are anticipated to account for about SEK 2.0 billion to SEK 2.5 billion.

End to a legal battle

Ericsson and Samsung have marked an end to a legal battle and have signed a multi-year patent license agreement for cellular technologies, including 5G. The new cross-license agreement covers the sale of network handsets and infrastructure from January 1, 2021, said Ericsson.

Furthermore, both the firms have agreed on a collaboration of technology projects to enhance the mobile industry in open standardization and develop valuable solutions for enterprises and consumers.

This settlement leads to a full stop to complaints filed by both firms to the United States International Trade Commission (USITC). Besides, the current lawsuits in several countries confirm the value of the strong patent portfolios of both firms. Details of the deal are confidential and will not be revealed (In December, Ericsson filed a lawsuit against Samsung in the US over royalty payments).

Ericsson’s IPR licensing revenues will be impacted by several factors, namely,

  • Expired patent license agreement’s pending renewal
  • Geopolitical impact on the handset market
  • The technological shift from 4G to 5G
  • Possible currency effects in future

According to Ericsson, IPR licensing revenues in the second quarter of 2021 and the new agreement covering sales from January 1, 2021, are anticipated to account for SEK 2.0 billion to SEK 2.5 billion (approximately USD 240 million to USD 300 million).

Investment in R and amp;D

Ericsson made significant investments in R and amp;D (Research and Development). It is also developing global mobile standards and is dedicated to license its standard-vital patents on fair, reasonable, and non-discriminatory (FRAND) terms to benefit consumers and organizations globally.

Samsung violated contractual commitments

In a complaint filed in the US, Ericsson claimed Samsung violated contractual commitments by failing to adhere to FRAND terms and conditions. The suit covered technology from 2G up to 5G.

FRAND system

The FRAND system gives access to technology and intellectual property, developed by inventors such as Ericsson, and rewards other creators for investing in R and amp;D in each mobile generation.

Ericsson acquired Cradlepoint

Meanwhile, Ericsson presented a proof of concept that involves the recently acquired Cradlepoint, which showed how network slicing could maintain constant output even with a busy network. As per Ericsson, this will play an essential role for organizations.

The company commented: “Several PCs running traffic-generator software emulate business-critical and best-effort data across a 5G connection while a mobile device injects congestion into the network.”

The company further added, “The demonstration shows the best-effort flows slowing to a crawl as the RAN and 5G connection becomes congested. In contrast, the business-critical data is protected and maintains a steady throughput rate.”

Expert’s take

Christina Petersson, Chief Intellectual Property Officer at Ericsson, commented: “We are delighted to sign a mutually beneficial agreement with Samsung. This important deal confirms the value of our patent portfolio and further illustrates Ericsson’s commitment to FRAND principles.”

Lesson learned

A settlement between Ericsson and Samsung ends all ongoing patent-related legal disputes.