World-renowned Swedish company Ericsson has jointly signed a patent license deal with the American Apple Inc, for state of the art technology that makes sharing and connecting via mobile networks much easier and faster.
This deal has lead to the cessation of a very long dispute between the two leading rivals. According to Ericsson, this deal would stand as an example of cooperation and mutual understanding, to other such leading companies that often find themselves face to face in combat.
The patent application was filed duly in the U.S district court and bore the statement by Ericsson accusing Apple to have operated with the technology developed by Ericsson under expired license. Ericsson estimated a claim from the revenues over their rights to intellectual properties to be around $1.52-$1.64 billion in 2015 compared to $9.9 billion in 2014. Despite Apple not having any expressed comments on the matter, one spokesperson did however exhibit concern for the protection and retaining of an individual’s or company’s intellectual property and expressed the possibility of paying fair money for patent rights.
UBS, the global financial services company, estimated that the said agreement proves to be highly profitable for Ericsson and would result in a profit rise by 13 percent in 2015 and 10 percent in 2016 with additional fees and other arrear costs. The agreement calls for Apple to pay a fraction of its iPhone and iPad sale profits to Ericsson in royalties for a period of seven years.
Kasim Alfalahi, the Chief Intellectual Property Officer for Ericsson, was of the opinion that the agreement was too vast covering the latest 4G-LTE generation of mobile technology with the older 2G and 3G technology versions. In an interview with Reuters he said, "It means we can continue to work with Apple in areas such as 5G radio network and optimization of the network."
Sundal Collier from the Investment bank ABG, observed that this agreement would eventually make Apple liable to pay Ericsson 0.5 percent of its revenue on iPads and iPhones. In a matter of days the shares for Ericsson took a big hit and prices rose by 5.6 percent by 1227 GMT.
Ericsson further claimed that Apple has violated 41 patents over the last three years with its iPhone and iPad, in particular patents related to GSM, UMTS and LTE technologies. In a statement, Ericsson said the agreement included a cross license covering both companies' patents and resolved all pending patent-infringement litigation between the companies.
Experts observed and claimed that if Ericsson gets the verdict then Apple would have to pay around 2-6 billion Swedish crowns annually, depending on an estimated number of sales of their products. Ericsson has locked down around a 100 patent licensing agreements while having about 37,000 patents for mobile communication.
Apple may know how to dominate the fruit market but Ericsson, as it turns out knows how to control it.