The only fun in covering patent disputes comes when there’s a clear winner, but Ericsson and Samsung aren’t even revealing the terms of their settlement.
Late last year we heard Ericsson was suing Samsung after accusing it of taking liberties when it comes to the licensing of FRAND patents. The Fair, Reasonable And Non-Discriminatory system is applied to standard-essential patents to stop patent holders from holding the entire industry to ransom. It would effectively be impossible to develop workable standards without it.
In an ideal world FRAND wouldn’t be needed and companies would just play nice with their contributions on the understanding that a rising tide lifts all ships. But organizations of all types are overwhelmingly incentivised towards short term gain and it’s inevitable that opportunists within them will spot the opportunity for quick wins in things like patent negotiations.
We don’t know what Samsung was up to, or even if it was going against the spirit of FRAND at all, but lawyers largely exist for when people are unable to settle disagreements amicably. So after five months of presumably extensive legal fees paid by both parties, they have arrived at the point they could have reached last year at no expense: a cross-license agreement.
Not only is the agreement boringly mutual and balanced, the two companies are spoiling everyone else’s fun by keeping the details confidential. So we don’t even get to work out who won and who lost – a vital calculation at a time when nobody has time for nuance or complexity. The only clue offered is Q2 licensing revenues forecast to be SEK 2-2.5 billion, which is roughly what they should have been in Q1 if Samsung had coughed up. This implies a score draw.
“We are delighted to sign a mutually beneficial agreement with Samsung,” said Christina Petersson, Chief Intellectual Property Officer at Ericsson. “This important deal confirms the value of our patent portfolio and further illustrates Ericsson’s commitment to FRAND principles.” Not as delighted at your lawyers, we suspect.