Samsung Agrees Licensing Deal With Ericsson To End Patent Dispute
Samsung has agreed a patent licensing deal with Ericsson to end an ongoing legal dispute that began back in 2012. The South Korean company will pay royalty costs and an initial licensing fee to gain access to numerous Ericsson patents covering LTE, UMTS, and GSM network standards.
It’s unclear how much Samsung has had to cough up for the deal, but Ericsson says its sales for the fourth quarter of 2013 will increase by SEK 4.2 billion (about $651 million) as a result. It will also put an end to the lengthy legal battle between the two companies.
“Ericsson’s settlement with Samsung is going to be an important future driver of its earnings,” JP Morgan analyst Rod Hall told Reuters. “The ongoing revenue could be approx 2.1 billion Swedish crowns annually and, with these revenues having 70 percent ongoing margin, they could add 5.4 percent to 2014 EPS.”
Back in 2012, Reuters reported that Ericsson had filed a lawsuit against Samsung after unsuccessfully trying to convince the company to license its patents for two years. But the Galaxy smartphone maker seems much more willing to enter into agreements of this kind of late.
Samsung recently struck a new licensing deal with Google and extended its existing agreement with Nokia for a further five years.