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LG and Ericsson Sign Global Patent Cross-Licensing Agreement

It never ceases to amaze me how fast the wireless communication sector has evolved. To keep up with the expectations of the consumer, in terms of faster speed and stronger connectivity, the pioneers in the industry have worked their fingers to the bone. And hence fueling the contest, as to who rules the markets.

LG and Ericsson have been one of the largest contributors to the 2G, 3G and 4G standards, and are determined to even dominate the 5G domain. Lately, the 2 companies had been in a patent licensing dispute which they finally decided to settle out of court. They’ve also renewed their global licensing agreement along fair, reasonable and non-discriminatory (FRAND) terms, covering both companies’ 2G 3G and 4G cellular standard essential patents.

The terms of the agreement have been kept confidential, although Ericsson’s chief intellectual property officer has remarked that the company is “very pleased” with the new agreement.

“It will allow us to focus on developing new technology for the global market and add to our already industry-leading patent portfolio. The agreement confirms the value of our patent portfolio and validates our ability to license it on FRAND terms and conditions,” he said.

Previously, LG had licensed Ericsson’s essential patents under three separate reciprocal licenses entered into in 2003, 2008, and 2014. All licenses, including the most recent ones, had expired. LG claimed that the offer had not been made in accordance with the FRAND terms in the first place. In addition to this, LG asserted that it owns a portfolio of essential patents related to the 2G, 3G and 4G standards, which it has repeatedly committed to license on FRAND terms. In the complaint against LG, Ericsson stated that they had been attempting to negotiate with LG to renew the parties’ reciprocal license for nearly a year, but the negotiations had been unsuccessful due to LG’s decline to pay the FRAND rate, giving it unfair competitive advantage over its rivals that have licensed Ericsson’s essential patents on FRAND terms. LG engaged in insincere negotiations and tried to make a counteroffer for a cross-license which covered Ericsson and LG’s entire portfolios of essential patents on terms that were significantly outside the range that many other participants in the mobile telecommunications industry have accepted. This ultimately followed a lawsuit against LG in March, 2018, constraining it to comply with Ericsson’s FRAND commitments.

Ericsson has never been reluctant to grant licenses to its patented technology which is essential to practice the 2G, 3G and/or 4G standards, as long as the necessary rules and regulations are followed. They are happy with the cross-licensing agreement, and look forward to new R&D investments – boosting innovation and promising continued success of open standardization.

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