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27 January 2014Patents

Samsung pens licensing deals with Google, Ericsson

Samsung has signed two deals, one with Google and the other with Ericsson, under which the companies will cross-license their patents globally.

In a statement, Samsung said that the agreement with Google, which owns Motorola Mobility, covers a “broad” range of technologies and business areas protected by existing patents and those filed over the next 10 years.

There was no further information on the patents or any financial terms of the deal.

“This agreement with Google is highly significant for the technology industry,” said Seungho Ahn, head of Samsung’s Intellectual Property Center. “Samsung and Google are showing the rest of the industry that there is more to gain from cooperating than engaging in unnecessary patent disputes.”

Allen Lo, deputy general counsel for patents at Google, added: “By working together on agreements like this, companies can reduce the potential for litigation and focus instead on innovation.”

The agreement, the companies said, will pave the way for “deeper collaboration” on research and development of current and future products and technologies, furthering their “long-term cooperative partnership”.

More details emerged from the deal with Swedish company Ericsson, with whom Samsung has now ended all patent litigation, including at the International Trade Commission and the US District Court for the Eastern District of Texas. The cross-licence agreement covers patents relating to GSM, UMTS and LTE standards for both networks and handsets.

The patents are standard essential, which means they must be licensed on fair, reasonable and non-discriminatory grounds.

To license the patents, Samsung will pay Ericsson an initial sum and continuing royalties for the (undisclosed) term of the new “multi-year” agreement, an Ericsson statement said.

Ericsson said the initial payment will affect its sales and net income in Q4 2013 by “SEK 4.2 b. [$652 million] and SEK 3.3 b. [$512 million] respectively”.

"We are pleased that we could reach a mutually fair and reasonable agreement with Samsung. We always viewed litigation as a last resort," said Kasim Alfalahi, chief intellectual property officer at Ericsson. "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."

Samsung is locked in patent litigation with Apple, but the latest deals are unlikely to allow the South Korean company to bolster its legal position against its US rival.

That’s because the agreements don’t appear to include a transfer of patents, said Rodney Sweetland, partner at Duane Morris LLP – they provide Samsung with a licence, which is a right to practice a technology.

“These deals give Samsung a freedom to operate – they don’t give them a hammer to hit Apple with.

“I would be astonished if the Ericsson-Samsung deal involved any kind of transfer of patents. There is a greater possibility with the Google deal, but Google is waging its own war against Apple (through Motorola Mobility),” he said.

While Ericsson appears to be earning “substantial” royalties from Samsung, the Google deal is highly unlikely to involve the exchange of money, Sweetland said, because of the firms’ collaboration over the Android platform.

“Samsung and Google are strategic partners – they work hand in glove.”

He added: “We expected the Google deal to be more opaque because they are a strategic alliance and neither side is going to be interested in releasing details about the nature and extent of that alliance, but we shouldn’t think they are hiding anything important.”

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