Samsung Sued By Ericsson For Not Paying Patent Royalties

The battle between Samsung and Ericsson over patent licensing hasn’t come to an end yet as Ericsson has filed a lawsuit against Samsung in the US. This has caused Ericsson’s shares to plummet on December 11, warning that the two companies’ revenues could be affected by this.

The Swedish telecommunications equipment maker says that the delay of royalties and legal fees could reduce Ericsson’s revenue by $118 to $177 million per quarter, starting from Q1, 2021.

Analyst Janardan Menon from Liberum says that patent royalties are expected to account for about a third of Ericsson’s forecast of $1.33 billion in profit in 2021. The lawsuit could lead to a revenue reduction of about 20% per quarter. Ericsson’s shares have fallen about 7%.

The Swedish company also says that switching from 4G to 5G smartphones would also affect the payment of royalties.

A Samsung spokesperson announces that once the company receives the complaint, it will review and come up with an appropriate response.

The last patent dispute between the two companies happened in 2012 when Ericsson sued Samsung for patent infringement. The lawsuit took two years to settle and eventually, Samsung had to pay Ericsson up to $650 million in royalties over the years to end the dispute.

Lawsuits over patent royalties are common in the tech industry. Previously, Samsung was also involved in lawsuits with Qualcomm and Apple over patents and royalties.

Samsung signed a licensing agreement with Ericsson in 2001 for patents for mobile devices and networks. The Korean electronics company renewed this contract in 2007 and then in 2014 after a long legal battle.

>>> Samsung Is Reportedly Working On A 600MP Phone Camera