Ericsson Stock Rises on Apple Deal

They Strike a Global Patent Deal, Settle Litigation

Shares in Ericsson were up almost 5% in Monday morning trading after the company announced it had inked a global patent license agreement with Apple and that the companies had agreed to settle litigation between them.

Financial terms of the agreement were not disclosed, but Ericsson and Apple will collaborate on “multiple technology areas,” including 5G, video network traffic management and wireless network optimization, Ericsson said. As part of the seven-year agreement, Apple will make an initial payment to Ericsson and, after that, will pay on-going royalties.

Ericsson noted that the agreement also ends investigations before the U.S. International Trade Commission, lawsuits pending in the U.S. District Court for the Eastern District of Texas and the U.S. District Court for the Northern District of California, as well as lawsuits in the United Kingdom, Germany and the Netherlands.

Including the impact of the settlement and ongoing intellectual property revenue, Ericsson estimated that full-year IPR revenues would reach 13 to 14 billion Swedish Krona  (US $1.5 to US $1.6 billion), up from US $1.2 billion (9.9 billion Swedish Krona) in the prior year, according to Reuters.

"We are pleased with this new agreement with Apple, which clears the way for both companies to continue to focus on bringing new technology to the global market, and opens up for more joint business opportunities in the future," said Kasim Alfalahi, chief intellectual property officer at Ericsson, in a statement.

Shares in Ericsson were up 45 cents (4.93%) to $9.58 each in Monday morning trading. Shares in Apple were up slightly (0.27%) to $106.32 each.