Ericsson and InterDigital have settled their long-standing patent infringement litigation. The dispute was due to go to trial in May, and it had been estimated that it could have cost Ericsson billions of dollars in fines and royalty payments if Ericsson had lost. InterDigital was claiming back payments of royalties on handsets sold by Ericsson since the early 1990s. Additionally, all claims asserted in the patent infringement litigation are dismissed.
In exchange, Ericsson will make an annual payment of a limited fixed amount through 2006 for sales of covered infrastructure equipment. The agreements cover both past and future sales of the relevant products.
For sales through December 2002, Ericsson and Sony Ericsson will pay ITC approximately US$ 34 million. For the years 2003 through 2006, Ericsson will pay ITC an annual fee of US$ 6 million for sales of infrastructure equipment. Sony Ericsson will, for the years 2003 through 2006, pay a royalty on each licensed product sold.
InterDigital is also in dispute with several other mobile phone companies, including Nokia and Samsung. Providing an agreement can be reached, then the company estimated that Nokia's royalty obligation for 2002 could be in the range of US$100 million to US$120 million and Samsung's royalty obligation for 2002 could be in the range of US$22 million to US$27 million based on the agreement with Ericsson.
William J. Merritt, President of ITC, stated, "We are very pleased to announce the completion of these agreements with Ericsson and Sony Ericsson. ITC has now licensed 25 manufacturers representing approximately 70% of the worldwide 2G GSM/TDMA and 2.5G GSM/GPRS/TDMA terminal market. These agreements will build upon the momentum of our ongoing 2G and 3G licensing efforts, strengthened by the market impact of establishing licensing rates for Nokia and Samsung, two key industry leaders."
Posted to the site on 18th March 2003
Posted to: www.cellular-news.com/story/8497.php