Samsung to pay Ericsson $650 million in cross-licensing deal

January 27, 2014
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Image credit: Daniel Waters/http://goo.gl/FjyeD3

Image credit: Daniel Waters/http://goo.gl/FjyeD3

Samsung will close another front in the patent war after agreeing to a cross-licensing deal with Swedish network equipment maker Ericsson.

Coming just hours after the announcement of a decade-long cross-licensing deal between Samsung and Google, the Ericsson deal ends a longtime dispute over patents related to GSM, 3G, and LTE technology.

Ericsson sued Samsung in November 2012, following two years of unsuccessful negotiations on a FRAND deal. Licensing patents on fair, reasonable, and non-discriminatory (FRAND) terms is mandatory for companies that wish to make their technologies a part of a standard, such as LTE. As such, Ericsson was obliged to license its patents to Samsung, but the Korean company argued that the fees demanded by Ericsson were too high. The case was also brought before the International Trade Community, the US body that rules on cross-borders trade disputes, where Ericsson asked for a ban on the Galaxy S3.

Part of the deal announced today, Samsung will make a one-time payment of roughly $650 million to Ericsson, followed by several recurrent payments of undisclosed amounts. The two companies agreed to cross-license their patent portfolio, which together make up a huge chunk of the IP related to LTE and other mobile network technologies.

Between the two newly announced deals, Samsung is now licensing thousands of valuable patents in a wide variety of fields, but there still is a big gap that needs to be plugged – Apple. The two sides have met over the past weeks as part of a court mandated mediation process, but discussions reportedly stalled due to disagreement over an anti-cloning agreement.

Besides its famous conflict with Apple, Samsung also has to deal with Rockstar, a shell company backed among others by Apple, Microsoft, and Sony, that has opened legal fire against most of the large Android OEMs at the end of last year.

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