Apple and Ericsson Settle Litigation With Global Patent License Agreement

[MacRumors]

Ericsson announced today that it has reached a seven-year global patent cross licensing agreement with Apple for standard-essential technologies, including GSM, UMTS and LTE cellular standards, thereby settling all litigation between the two technology companies.

Apple will make an upfront payment to Ericsson and continue paying royalties on an ongoing basis. The terms of the agreement are confidential, but investment bank ABG Sundal Collier believes Apple could be charged around 0.5% of iPhone and iPad revenue, per Reuters.

The licensing agreement applies to several technology areas, including 5G development, video network traffic management and wireless network optimization, and grants certain other undisclosed patent rights. The deal ends all litigation before the U.S. International Trade Commission, U.S. District Courts and European courts.

"We are pleased with this new agreement with Apple, which clears the way for both companies to continue to focus on bringing new technology to the global market, and opens up for more joint business opportunities in the future," said Kasim Alfalahi, Chief Intellectual Property Officer at Ericsson.

Apple originally filed suit against Ericsson in January 2015, arguing that it was demanding excessive royalties for patents not essential to LTE standards. Ericsson countersued in a Texas courtroom just hours later, seeking an estimated $250 to $750 million in annual royalties for Apple to continue licensing its patented wireless technologies. Apple declined to honor those demands.

Ericsson subsequently sued Apple again in February 2015 for allegedly infringing 41 wireless-related patents that it believed to be critical to the functionality of products such as the iPhone and iPad. At the time, Ericsson filed two complaints with the U.S. ITC in an effort to secure a U.S. sales ban on infringing products, in addition to filing seven complaints with the U.S. District Court for the Eastern District of Texas.

The U.S. ITC agreed to launch an investigation into the Apple-Ericsson patent infringement claims in March 2015, and Ericsson extended the lawsuit to Germany, the Netherlands and the United Kingdom in May 2015, but today's agreement precedes any courtroom rulings.

Ericsson is the world's largest provider of mobile network equipment and holds over 35,000 patents related to 2G, 3G and 4G wireless technologies. Ericsson's cellular technology patents are considered essential and are subject to fair, reasonable, and non-discriminatory terms (FRAND).

Apple's previous licensing deal with Ericsson signed in 2008 expired in January 2015.

Article Link: Apple and Ericsson Settle Litigation With Global Patent License Agreement

 

[Jaro65]

Good to see this finally coming to a closure.

 

[HiVolt]

Pay up Apple, you can afford it.

 

[NoNothing]

Pay up Apple, you can afford it.

It was always a question of how much to pay. If Erricson jumped its demands by 300% from the 2008 agreements, I could see App,e going: "Whoa buddy. WTF?"

 

[Popeye206]

Good to see this one end.

 

[dk001]

Finally. It took way too long for this conclusion.

 

[Xavier]

Come on, let's be FRANDS

 

[TEG]

Global standards shouldn't have all patents cancelled and no license fees. They are standards, everyone is supposed to follow them, otherwise, people will create their own systems and everything will fragment.

 

[usarioclave]

Pay up Apple, you can afford it.

I'll take a kidney and lung. After all,you have an extra.

 

[Tech198]

Good to see this one end.

I'd say... seven years it a bit long...

 

[gnasher729]

Apple originally filed suit against Ericsson in January 2015, arguing that it was demanding excessive royalties for patents not essential to LTE standards.

Can you please check this sentence? It doesn't make sense. For non-essential patents, there is no reason why Ericsson can't charge any amount they like, because they are not essential, which means Apple has the free choice of using them or not using them. If Ericcson demanded excessive royalties for patents _essential to LTE standards_, that's something that Apple could complain about.

 

[Frosties]

It brings me joy that our Apple stops being a pirate.

 

[H2SO4]

Global standards shouldn't have all patents cancelled and no license fees. They are standards, everyone is supposed to follow them, otherwise, people will create their own systems and everything will fragment.

LOL, you mean how like most other companies use USB where Apple uses Lightning?

 

[mateytate]

I'm waiting for someone on here to call Ericsson a patent troll like they did on a previous article based on this ongoing saga, it made me laugh!

 

[H2SO4]

I'm waiting for someone on here to call Ericsson a patent troll like they did on a previous article based on this ongoing saga, it made me laugh!

Won’t be long. Don’t worry.

 

[ArtOfWarfare]

I'll take a kidney and lung. After all,you have an extra.

The kidney is redundant but I'm pretty sure you need both lungs to survive without a breathing machine.

 

[ronntaylor]

If I remember correctly, Ericsson was demanding 3.5 - 5% of iOS revenue. If the story is correct, Apple got off royally if they're indeed only paying .5%. Still a lot of money.

 

[RedOrchestra]

I learned a long, long time ago never to make any contract subject to the laws of Texas - looks good on a California company though - next time think Delaware.

 

[WigWag Workshop]

Good to see they reached an agreement

 

[apolloa]

In other words, Apple's idea of business negotiations have concluded before Ericsson ripped them apart in court. I would have paid to see that but hey ho. Seems like they got of very very lightly so whatever tactics they have been using seem to have worked.

 

[Michael Goff]

The kidney is redundant but I'm pretty sure you need both lungs to survive without a breathing machine.

Nope.

Living with one lung doesn't usually affect everyday tasks or life expectancy, though a person with one lung wouldn't be able to exercise as strenuously as a healthy person with two lungs, said Dr. Len Horovitz, a pulmonologist at Lenox Hill Hospital in New York City.

 

[kdarling]

It was always a question of how much to pay. If Erricson jumped its demands by 300% from the 2008 agreements, I could see App,e going: "Whoa buddy. WTF?"

According to court filings, Ericsson was offering Apple comparable terms to what everyone else pays.

If I remember correctly, Ericsson was demanding 3.5 - 5% of iOS revenue. If the story is correct, Apple got off royally if they're indeed only paying .5%. Still a lot of money.

It was only 1.5%, but (as I've pointed out here for years), such higher base rates are for deals without cross licensing.

Apple has always wanted to get lower rates without cross licensing. While that's an understandable business desire, it probably wouldn't sound fair to a jury that a company... which profits so much more than others... also wants to pay less than others for using the same technology.

So it likely was the threat of a Texas jury trial that made Apple's lawyers settle ahead of time. Same thing happened back when Nokia filed for a jury trial in Delaware. Not that it's a surprise. It was widely assumed Apple would have to cut a deal.

Plus, cross licensing helps everyone. It cuts down on royalties, and it cuts down on lawsuits. Apple is maturing in the phone maker business.

 

[acegreen]

cross licensing

I like that its called cross licensing but really its just a one way street. Ericsson is the mother of all cellular technology and they deserve it. Nothing Apple has that Ericsson wants in this case. I think Apple should be paying a lot more than 0.5% because these patents are so valuable. Without cellular data, there is no iPhone.

 

[lowendlinux]

I don't think they would have agreed if Apple had nothing that they wanted,its not like they don't have the money or fortitude for the fight. I'd be very interested to find out what they wanted to cross license though Apple patients aren't top my knowledge in Ericssons core business.

 

[MH01]

Took long enough, but at least this is one Legal case we can put to rest on MR.