South Korean electronics giant Samsung will pay telecom equipment maker Ericsson about 4.2 billion Swedish Kronas (over USD 650 million) to settle patent-related disputes, including royalties.
Ericsson and Samsung have reached an agreement on global patent licences between the two companies relating to GSM, UMTS, and LTE standards for both networks and handsets.
"We are pleased that we could reach a mutually fair and reasonable agreement with Samsung. We always viewed litigation as a last resort. "This agreement allows us to continue to focus on bringing new technology to the global market and provides an incentive to other innovators to share their own ideas," Ericsson Chief Intellectual Property Officer Kasim Alfalahi said in a statement.
Also read: Google, Samsung announce global patent agreement
The Swedish firm had dragged Samsung to court alleging infringment of patents involving technology for clearer voice transmission, touchscreen functions and network efficiency, which was countered by the South Korean company.
"The agreement ends complaints made by both companies against each other before the International Trade Commission (ITC) as well as the lawsuits before the US District Court for the Eastern District of Texas," it said.
The agreement includes an initial payment and ongoing royalty payments from Samsung to Ericsson for the term of the new multi-year license agreement. The details of the agreement are confidential and will not be disclosed.
"The initial payment in the agreement will impact Ericsson sales and net income in Q4 2013 by SEK 4.2 billion and SEK 3.3 billion, respectively," it said.
Ericsson expects the initial payment in the agreement to impact its operating cash flow in the beginning of 2014. Samsung is also embroiled in a legal tussle with Apple in several countries, with the iconic iPhone and iPod maker alleging that many of Samsung products infringe its patents.
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