Apple and Ericsson reach patent agreement

Swedish telecom giant Ericsson and Apple have signed a patent licence agreement that ends a year-long legal dispute between the two technology giants. Under the seven-year deal, Apple agreed to pay the Swedish company an undisclosed initial sum after which the iPhone maker would make ongoing royalty payments.

In the announcement, Ericsson's chief intellectual property officer Kasim Alfalahi said the agreement "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".

Ericsson had sued Apple in January in a US district court claiming the American company's licence to use technology created by Ericsson had expired and that two years of further negotiations had not yielded a deal.

Although the terms of the agreement remain confidential, Reuters reported that UBS analysts estimated the deal would mean for Ericsson "a catch-up payment of 3.6 billion crowns (€3.8m, £2.8m, $4.2m) for 2015, including a one-off sum of 0.5 billion (€5m, £3m, $4.5m) covering items such as legal fees".

Ericsson estimated that the overall proceeds from the intellectual property rights would rise to 13 to 14 billion crowns (€1.5bn, £1.1bn, $1.6bn) in 2015. The company's shares were up 5.6% after the agreement, marking their biggest rise in almost 17 months.

There has so far been no comment from Apple on the agreement.