The settlement will see Apple pay Ericsson an undisclosed proportion of its revenues for every iPad and iPhone
Ericsson has settled its wireless technology patent disputes with Apple in a deal that will see Apple pay ongoing royalties to the Swedish telecommunications equipment maker.
The deal resolves all pending patent litigation between the two companies, as well as investigations before the US International Trade Commission, Ericsson said. The company’s shares traded up 7 percent on Monday following the announcement.
Ericsson said the specific terms of the agreement were confidential, but the company estimated its intellectual property rights revenue for 2015 would be 13 to 14 billion crowns (£1bn), up from 9.9bn crowns in 2014.
ABG Sundal Collier, an investment bank, said in a note to clients it estimates Apple will pay Ericsson about 0.5 percent of its iPad and iPhone revenue as a result of the deal.
The seven-year agreement includes a global patent cross-licence covering both companies’ standard-essential patents, including GSM, UMTS and LTE technologies, and granting unspecified other patent rights, Ericsson said.
Apple is to make an initial payment to Ericsson, followed by ongoing royalty payments, according to Ericsson.
The agreement settles pending litigation in the US District Court for the Eastern District of Texas and the US District Court for the Northern District of California, as well as lawsuits in the United Kingdom, Germany and the Netherlands, the company said.
The deal will see Ericsson collaborating with Apple on upcoming technologies including 5G standards and the optimisation of existing wireless networks, according to Ericsson chief intellectual property officer Kasim Alfalahi.
“We are pleased with this new agreement with Apple, which clears the way for both companies to continue to focus on bringing new technology to the global market, and opens up for more joint business opportunities in the future,” Alfalahi stated.
Ericsson filed a mobile technology patent claim against Apple in January, after Apple sued Ericsson earlier that month, claiming Ericsson was demanding excessive royalty payments.
Ericsson filed lawsuits against Apple in the UK, Germany and the Netherlands over patent royalty payments in May of this year.
Apple did not immediately respond to a request for comment.
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