Apple, Ericsson kiss and make up while signing a new licensing deal

Apple, Ericsson kiss and make up while signing a new licensing deal
Reuters reports that Apple and Ericsson have agreed to settle a patent battle between the two which started in 2015 when both companies sued each other claiming that they each had patents infringed on by the other. Also part of the legal issues were disagreements that both sides had relating to licensing their 2G, 3G, and 4G technologies.

Both companies buried the hatchet and peace reigned until October 2021 when Ericsson sued Apple over 5G patent licensing. Two months later, Apple sued Ericsson and accused the networking and telecom firm of using "strong-arm tactics" in a bid to renew licensing over patents that had expired.

Apple and Ericsson agree to end a legal war over royalty payments related to 5G wireless patents used with iPhone

Today's deal means that Apple and Ericsson shook hands ending a legal fight over royalty payments for the use of 5G wireless patents in the iPhone. Ericsson said that the settlement includes the granting of a global patent license to Apple and global cross-licenses for standard-essential cellular technology patents. Standard-essential patents are required in order for a licensee to meet certain industry standards and as a result, they are licensed using royalty terms that are Fair, Reasonable, And Non-Discriminatory (FRAND).

In a statement, Ericsson said, "The settlement ends all ongoing patent-related legal disputes between the parties." The battle between Apple and Ericsson intensified when negotiations on a new seven-year licensing contract covering telecom patents broke down. But that is all in the past after today's announcement and Ericsson noted that the settlement will "strengthen their technology and business collaboration," meaning, of course, partnerships between Apple and Ericsson.

If you're wondering how Apple ended up owning some intellectual property related to mobile wireless modems, you might recall that during the summer of 2019 the company purchased Intel's modem business for $1 billion. The transaction gave Apple ownership of some industry standard-essential patents.

Including the effects of the settlement with Apple, Ericsson forecasts fourth-quarter intellectual property rights (IPR) licensing revenues of $530.3 million-$578.5 million. Besides today's agreement with Apple, that figure includes intellectual property rights with other licensees.

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You may have experienced some deja-vu when reading this news because it might have reminded you of the last-minute settlement Apple and Qualcomm signed off on back in 2019 just as opening arguments were wrapping up for a trial between the two tech giants. Apple paid Qualcomm a chunk of cash and both firms agreed to a six-year licensing agreement with a two-year option. And both sides signed a multi-year chipset supply contract.

Apple's plan to use its own 5G modem chips for the iPhone 15 series was stymied by a pair of Qualcomm patents

Apple has been working on its own modem chips which were expected to debut in next year's iPhone 15 line. But issues surrounding two patents owned by Qualcomm mean that the latter will continue to supply the vast majority of iPhone 15 handsets with the important component. Had Apple been able to use its own modem chip, Qualcomm's share of modem chips used on the iPhone 15 series would have been reduced to 20%.

But this goes to show how important licensing intellectual property is to Apple, even when it plans on producing its own modem chip. Certain key technologies could be covered by patents and licensing them, even when dealing with the complex licensing arrangements that Qualcomm demands (remember, "no license, no chips") can make or break a big project. Even a company like Apple can be stymied by a patent.

Eventually, Apple and Qualcomm will reach an agreement, or Apple will figure out a way to design its modem chips without having to license certain patents from Qualcomm. But for now, it is Qualcomm's modems that you'll find inside the iPhone including 2023's iPhone 15 family.

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