Ericsson and Chinese vendor ZTE agreed on Friday to settle patent infringement disputes against each other.
The two firms signed a global cross-licensing deal on the condition that both parties also agreed to drop all pending litigation. ZTE agreed to sign an accord to pay Ericsson royalties for access to certain Ericsson patents. The companies did not disclose the financial terms of the deals. In April 2011, Ericsson started legal actions in Germany, the UK and Italy against ZTE for patent infringements relating to GSM and 3G technology, a move that prompted ZTE to countersue in China soon after.
In a statement to the Shenzhen Stock Exchange, ZTE denied that it was ordered to pay €500 million to Ericsson and was banned from entering the European market.
Ericsson's chief intellectual property officer Kasim Alfalahi said in a statement that the company had the strongest patent portfolio in the industry with over 27,000 patents and "any company which sells mobile devices or systems needs a licence from Ericsson. We have signed more than 90 patent agreements with different vendors worldwide. Now we can add ZTE to this group."
This move to drop the lawsuits comes after Ericsson announced it was overhauling its licensing department in a move to generate more income from its patents. The company generated €523 million from licensing its intellectual property portfolio in 2010.
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