Ericsson and Samsung enter patent licensing deal, putting end to multiple lawsuits

Marking an end to the legal dispute, Ericsson and Samsung have signed a multi-year global patent license agreement for cellular technologies which will include 5G as well. This settlement is a positive move for Ericsson where the dispute with Samsung concerning unresolved contract renegotiations has hugely hit the IPR licensing revenue.

This deal of Ericsson and Samsung will hope to resolve other outstanding expired patent license agreements. This deal hugely covers the sale of network infrastructure and handsets from 01 January 2021, nevertheless, the details were not disclosed. Commenting on the deal, various analysts interpret it on the overall resolution of IPR renegotiation tied to 5G.

The deal will have a likely effect on the timing resolution of IPR negotiations. This agreement addresses the future impact of these IPR contract renegotiations between Samsung and Ericsson, notwithstanding the position of Samsung as the largest 5G handset supplier. The deal can affect the quarterly result of Ericsson. The IPR licensing revenue for the second quarter which covered the Samsung contract is expected to be $240.3 million to $300.3 million, where the first quarter shows the revenue falls to $96.1 million.

There are chances that the patent revenue will be impacted seeing factors such as market scenario including the geopolitics and the potential currency effect and the probable shift from 4G to 5G. Nevertheless, Ericsson hopes to grow IPR revenue with the help of its strong IP portfolio of more than 57,000 patents and investment of more than $4.8b annually.

Commenting on the deal, Ericsson's Chief Intellectual Property Officer, Christina Petersson said, "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." Samsung declined to comment.

This deal will even cover the cooperation on the technology products for advancing the open standards in the mobile industry. Such a deal greatly impacts the functioning of the parties where it ends multiple lawsuits filed in countries, ending the respective complaints filed in the US International Trade Commission and various district courts.