Ericsson and OPPO sign global patent cross license agreement
Ericsson (NASDAQ: ERIC) and OPPO have signed a multi-year global patent cross license agreement covering cellular technologies, including 5G. OPPO, a leading smartphone vendor, will make royalty payments to Ericsson. The agreement also includes business cooperation on 5G-related projects such as device testing and customer engagements.
This royalty-bearing license agreement allows Ericsson to further invest in fundamental communications technologies. It reflects the mutual respect for each other's patent portfolios and confirms the effectiveness of the patent licensing industry. The financial benefit of this agreement was already reflected in Ericsson's Q2 2024 financial results.
Ericsson, a leading contributor to 3GPP and global mobile standards development, holds a patent portfolio of over 60,000 granted patents. The company invests more than SEK 45 billion annually in R&D, strengthening its position as a 5G vendor and patent holder.
- Multi-year global patent cross license agreement signed with OPPO
- Royalty payments from OPPO to Ericsson
- Business cooperation on 5G-related projects
- Financial benefit already reflected in Q2 2024 results
- Strengthens Ericsson's position in 5G technology and patents
- None.
Insights
The patent cross-license agreement between Ericsson and OPPO brings mutual financial benefits to both companies. For Ericsson, the royalties from OPPO reinforce its revenue stream from its intellectual property portfolio, which spans over
While the financial specifics of the agreement were already reflected in Ericsson's Q2 2024 results, the ongoing nature of these royalty payments provides a stable and predictable income stream. This stability is likely to be viewed positively by investors, as it enhances Ericsson's financial health and predictability.
In the short-term, Ericsson can leverage these funds to bolster its R&D activities further. In the long-term, it strengthens their position in the competitive 5G market, potentially leading to more lucrative licensing agreements and expanding into areas like IoT and consumer electronics.
For OPPO, having a legally sound agreement allows them to focus on innovation and market expansion without legal hurdles, which could translate to higher market share and revenues.
This agreement highlights the critical nature of patent cross-licensing in the tech industry, particularly for technologies like 5G that require extensive R&D and standardization. Cross-licensing allows companies like Ericsson and OPPO to share their innovations, ensuring that advancements in cellular technology are accessible and usable by multiple manufacturers. This fosters a competitive and innovative market environment.
The collaboration on 5G-related projects such as device testing and customer engagements stands to benefit both companies. For Ericsson, this means deeper integration with the smartphone market, enabling them to refine their 5G infrastructure and services based on real-world feedback. For OPPO, this cooperation provides access to cutting-edge 5G technology and expertise, enhancing the quality and performance of their devices.
Overall, this agreement is a testament to the importance of collaboration between tech giants to drive technological advancements and deliver better products to consumers. It shows how companies can balance competition with cooperation to push the industry forward.
- Multi-year global cross license covering cellular technology, including 5G
- Royalty payments from OPPO to Ericsson
- Business cooperation on 5G related projects such as device testing and customer engagements
In addition to a cross license, OPPO and Ericsson will conduct business cooperation on a number of projects related to 5G, including device testing, customer engagements and marketing activities.
Christina Petersson, Chief Intellectual Property Officer at Ericsson, says: "This important royalty bearing license agreement with OPPO allows Ericsson to further invest in fundamental communications technologies. The license confirms that the patent licensing industry works and is proof that a vast majority of license agreements are based on business negotiations. It also reflects the mutual respect for each other's patent portfolio. We now look forward to growing Ericsson's IPR revenues with additional 5G agreements and expansion into additional licensing areas, such as IoT and consumer electronics."
This agreement is in line with global practice where companies that provide products using cellular 3GPP standards such as 5G need a license agreement with patent holders in order not to infringe these patents, and also for patent holders to be compensated for their R&D investment.
The financial benefit of this agreement was already reflected in Ericsson's Q2 2024 financial results.
Over several decades, Ericsson has been a leading contributor to 3GPP and to the development of global mobile standards. The value of Ericsson's patent portfolio of more than 60,000 granted patents is strengthened by our leading position as 5G vendor, our leading 5G patent portfolio and annual investments of more than
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SOURCE Ericsson
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