Credit: Shutterstock photoWireless equipment company EricssonERIC and Huawei renewed their patent cross-licensing agreement in a contract that will see the two rivals share wireless technology in their networking equipment.
Under a cross license, which is a part of the agreement, the firms will able to access and implement each others' standard essential patents ("SEP") for GSM, UMTS and LTE technologies globally. SEP holders are required to offer other companies licenses under fair, reasonable and non-discriminatory (FRAND) terms.
The renewed agreement calls for Huawei to make ongoing royalty payments to Ericsson based on actual sales from this year onwards.
Commercial terms of the new deal have been kept under wraps.
The agreement stands for promoting innovation in technology, as well as sharing and standardizing technology and accelerating industry evolution. In the coming times, Ericsson and Huawei will have to contend with a much bigger competitor, as Nokia Corporation NOK and Alcatel Lucent celebrated their first day as a combined company yesterday.
Some time back, Ericsson and Apple Inc. AAPL were locked in a legal battle surrounding Apple's use of the former's wireless technology in the iPhone and iPad. Ericsson claimed that the patent Apple infringed upon was related to 2G, 3G, and 4G-LTE technology. The year-long patent dispute between the companies came to an end with a global license agreement that the two companies signed last month. (Read more: Ericsson & Apple Call Truce, Sign Global Patent Agreement )
Ericsson presently carries a Zacks Rank #2 (Buy). Another stock from the same space that investors could take a look at is Motorola Solutions, Inc. MSI , sporting a Zacks Rank #1 (Strong Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
