Ericsson Settles Disputes With Apple, Plans Tech Cooperation

Apple and Ericsson End Patent Lawsuit, Plan Cooperation
  • Apple to pay royalties to Ericsson as part of 7-year pact
  • Ericsson sees patent revenue of $1.5 billion or more for 2015

Ericsson AB and Apple Inc. settled a legal dispute over mobile-device patents, reaching a licensing agreement and paving the way for cooperation between the two technology-industry giants. Ericsson shares jumped.

The companies reached a global cross-licensing pact and plan to collaborate in multiple technology areas, including 5G development, video network traffic management, and wireless networks, Ericsson said Monday. Apple will make an initial payment to Ericsson and then pay royalties as part of the seven-year pact. Specific terms weren’t disclosed.

The companies were entangled in a global licensing battle, with Ericsson claiming the iPhone maker infringed on its patents for technologies fundamental to the way mobile devices communicate. Ericsson, the biggest maker of wireless networks, is seeking more revenue from its intellectual property as competition in its main business weighs on revenue growth.

Ericsson shares rose 5.4 percent to 82.90 kronor at 9:03 a.m. in Stockholm. Apples shares fell 2.7 percent to $106.03 in New York Friday.

Ericsson said it estimates intellectual-property revenue of 13 billion kronor ($1.5 billion) to 14 billion kronor this year, including positive effects from the Apple settlement.

The companies sued each other in January after talks over a license renewal failed, seeking court rulings on whether Ericsson’s royalty demands on fundamental technology were fair and reasonable. Apple had been paying royalties to Ericsson before a license expired.

While Apple’s iPhone and iPad have won over users in recent years, Ericsson helped pioneer the mobile-device market with its handsets in the 1990s. The company sold its mobile-phone business to Sony Corp. in February 2012, five years after Apple introduced the iPhone, which is now its largest revenue source.

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