Apple Settles With Ericsson In World-Wide Patent Dispute

After a year-long legal battle that rolled through court rooms in the U.S. and Europe, Apple has settled a patent dispute with Swedish telecom giant Ericsson, for an undisclosed amount that was large enough to bump Ericsson stock up by four per cent.

Ars Technica explains that the patent dispute began when an Apple licensing deal with Ericsson expired last year. It was related to Long-Term Evolution technology (the “LTE” part of the popular 4G LTE wireless data standard.) Apple insisted its work on the LTE standard was all done in-house — a product of “years of hard work by Apple engineers and designers and billions of dollars of Apple research and development, and which have nothing to do with Ericsson’s patents,” as a company spokesperson put it back in January.

It was a fairly nasty corporate legal battle, with Apple essentially accusing Ericsson of trying to use its patent deal to steal Apple’s lunch, while Ericsson said Apple was trying to skip out on paying fairly-negotiated licensing fees. The companies ended up suing each other, repeatedly.

Ericsson has fought similar legal battles with other companies, including Korea’s Samsung… which Apple also had a patent dispute with, resulting in a $548 million settlement paid by Samsung to Apple.  In the wacky world of wi-fi, all that remains is for Samsung to sue Ericsson for the same amount for some reason, and then all the money could end up back in its original hands, minus legal fees of course.

(On the other hand, Apple’s settlement with Ericsson could dwarf the money they got from Samsung. Ars Technica relates an estimate that Ericsson could end up getting 0.5 percent of the revenue from iPads and iPhones, which make up the lion’s share of Apple’s $51 billion annual income.  After the settlement, Ericsson’s revenue from intellectual property licensing is estimated to rise by about 50 per cent.)

The Wall Street Journal sees the Apple-Ericsson feud as a prime example of “the complex relationships in the telecommunications sector, where standardization of technologies and increased penetration of smartphones rely on sharing research and development globally.”

Such standardization is crucial to make mobile devices compatible with each other, and provide end users with a smooth and simple mobile Internet experience.  It’s remarkable that consumers can purchase a huge variety of devices, at highly competitive prices, from a variety of vendors, and yet enjoy an almost completely transparent mobile Internet environment: everything just works, almost all the time, without fiddling or fine-tuning.

This is an astounding technological achievement, but it has led to some friction between pioneers and innovators – or, as Bloomberg Business puts it, the Apple-Ericsson battle was “part of a broader fight roiling the technology industry, between the older companies that created some of the basics of wireless and those who make the devices using it.”

With the lawsuit out of the way, and related investigations concluded, Ericsson’s chief intellectual property officer, Kasim Alfalahi, told Reuters his company looked forward to working with Apple “in areas such as 5G radio network and optimization of the network.”