Ericsson settles patent dispute with Samsung

FILE PHOTO: Ericsson logo is seen at its headquarters in Stockholm, Sweden June 14, 2018. REUTERS/Olof Swahnberg

STOCKHOLM (Reuters) - Ericsson has reached a "multi-year" agreement on global patent licences with Samsung, the Swedish telecom equipment maker said on Friday, ending a dispute that hit its first-quarter revenue.

Ericsson said it had not disclosed how many years the deal, which includes patents for all cellular technologies, would last. It said it now expects second-quarter patent licensing revenue to be 2 billion crowns ($237 million) to 2.5 billion crowns.

The settlement, which ends ongoing lawsuits in several countries, was done in record time as patent disputes between technology companies can often take years to settle.

The current dispute started in December, while the last tussle between the two companies was in 2012 and took two years to resolve.

The cross-licence agreement covers sales of network infrastructure and handsets from Jan. 1, 2021, it said in a statement. The companies declined to disclose the terms citing confidentiality.

Ericsson invests about 40 billion crowns every year in research and has a portfolio of more than 57,000 patents.

Its Nordic rival Nokia, which also has a substantial patent portfolio, settled a patent issue with Samsung earlier this year.

In the first quarter, Ericsson's patent licensing revenue fell to 0.8 billion crowns from 2.5 billion crowns a year earlier. Royalties from its patent portfolio account for roughly a third of Ericsson's operating profit.

Ericsson said its patent revenue continue to be affected by factors such as expired licence agreements pending renewal, geopolitical impacts on the handset market, a technology shift from 4G to 5G, and possible currency effects going forward.

It still has an ongoing dispute with Dutch telecom company KPN NV, which last month filed a patent-infringement complaint against Ericsson in a district court in Texas.

(Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent, in Stockholm; Editing by Niklas Pollard and David Clarke)

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