Ericsson and Samsung sign global patent license agreement
Ericsson (NASDAQ: ERIC) and Samsung have finalized a multi-year global patent license agreement affecting all cellular technologies, effective from January 1, 2021. This agreement resolves ongoing legal disputes and validates both companies’ patent portfolios. IPR licensing revenues for Ericsson are projected to be between SEK 2.0 billion and 2.5 billion in Q2 2021, influenced by various market factors and the transition from 4G to 5G. Ericsson’s extensive patent portfolio includes over 57,000 patents, supported by approximately SEK 40 billion in annual R&D investments.
- Finalization of a multi-year patent agreement with Samsung, strengthening Ericsson's IP portfolio.
- Projected IPR licensing revenues of SEK 2.0 billion to 2.5 billion in Q2 2021.
- Over 57,000 granted patents, enhancing competitive position in cellular technology.
- Ongoing factors affecting IPR licensing revenues include expired agreements and geopolitical impacts.
- Transition from 4G to 5G may hinder short-term revenue stabilization.
STOCKHOLM, May 7, 2021 /PRNewswire/ -- Ericsson (NASDAQ: ERIC) and Samsung have reached a multi-year agreement on global patent licenses between the two companies, including patents relating to all cellular technologies. The cross-license agreement covers sales of network infrastructure and handsets from January 1, 2021.
Furthermore, Ericsson and Samsung have agreed on technology cooperation projects to advance the mobile industry in open standardization and create valuable solutions for consumers and enterprises.
This settlement ends complaints filed by both companies before the United States International Trade Commission (USITC) as well as the ongoing lawsuits in several countries and confirms the value of the strong patent portfolios of both companies. The details of the agreement are confidential and will not be disclosed.
Ericsson's IPR licensing revenues continue to be affected by several factors, mainly expired patent license agreements pending renewal, geopolitical impact on the handset market, technology shift from 4G to 5G, and possible currency effects going forward. In the second quarter 2021, IPR licensing revenues, including the new agreement covering sales from January 1, 2021, are expected to be SEK 2.0 b to 2.5 b.
Christina Petersson, Chief Intellectual Property Officer at Ericsson says: "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."
Over several decades, Ericsson has made significant investments in R&D and in developing global mobile standards and is committed to licensing its standard-essential patents on fair, reasonable and non-discriminatory (FRAND) terms for the benefit of consumers and enterprises everywhere. The FRAND system allows access to technology and intellectual property, developed by inventors like Ericsson, and also rewards those inventors for their major up-front investment in R&D in each mobile generation.
The value of Ericsson's IP portfolio extends to more than 57,000 granted patents and is strengthened by annual investment in R&D of approx. SEK 40 b. With a leading global position in 5G, the company is confident of growing its IPR revenues long term, thereby further maximizing the value of the overall patent portfolio.
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