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After anti-litigation deal with Google, Samsung makes patent peace with Ericsson

848 Viewed Alka Anand Singh Comments Off on After anti-litigation deal with Google, Samsung makes patent peace with Ericsson

Samsung has inked a patent licensing deal with Ericsson in a move that should reduce its risk of litigation in future.

Ericsson announced its “multi-year” cross-licensing agreement with Samsung on Monday, under which it agreed both an initial payment and ongoing royalty payments that could run into the billions of dollars.

Though details of the agreement have not been disclosed, Ericsson said today that the “initial payment in the agreement will impact Ericsson sales and net income in Q4 2013 by SEK 4.2bn ($652m) and SEK 3.3bn ($512m) respectively.”

Ericsson will report the financial impact of Samsung’s initial payment in its fourth quarter earnings update scheduled for later this month.

Separately, Samsung is due to head into arbitration with Nokia shortly to agree the patents royalty rates it will pay the Finnish company, with an agreement expected by 2015.

The agreement between Ericsson and Samsung settles the companies’ disputes over standards-essential patents (SEPs), which holders are obliged to license on “fair, reasonable and non-discriminatory” (FRAND) terms. Royalty rates however can be negotiated and Ericsson has previously accused Samsung of not agreeing to its FRAND terms.

In November 2012, Ericsson filed suit in the Eastern District of Texas accusing Samsung of not playing ball over its FRAND terms for 24 SEPs.

Then in December 2012, Ericsson filed a complaint with the US International Trade Commission over 11 wireless patents, which Samsung responded to shortly after with its own request with the ITC for an injunction on Ericsson products.

The new agreement involves the pair cross-licensing global wireless patents related to GSM, UMTS, and LTE standards for both networks and handsets, according to Ericsson.

“We are pleased that we could reach a mutually fair and reasonable agreement with Samsung. We always viewed litigation as a last resort,” Kasim Alfalahi, chief intellectual property officer at Ericsson, said in a statement.

“This agreement allows us to continue to focus on bringing new technology to the global market and provides an incentive to other innovators to share their own ideas.”

Samsung on Monday also announced a patent cross-licensing agreement with Google covering existing patents and patents filed by each company over the next 10 years. Samsung said they cover a “broad range of technologies”.

As noted elsewhere, the pair are not in any disputes with each over patents, but both have faced scrutiny by the antitrust regulator in Europe for using SEPs to seek injunctions on rival products even where there is a willing licensee (in Google’s case through Motorola’s SEP-based efforts to gain an injunction on Apple products in Germany).

“By working together on agreements like this, companies can reduce the potential for litigation and focus instead on innovation,” Allen Lo, deputy general counsel for patents at Google, said.

“Samsung and Google are showing the rest of the industry that there is more to gain from cooperating than engaging in unnecessary patent disputes,” Dr Seungho Ahn, head of Samsung’s intellectual property center, added.

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