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Samsung and Ericsson settle yearlong patent dispute

North Carolina businesses may be interested in the settlement of two electronics manufacturing companies after a long court battle. The settlement is on good terms and the firms look to continue an amicable business relationship into the future.

In November 2012, a licensing deal between electronics giants Ericsson and Samsung ended, with the two companies unable to agree on the terms of extension. The companies were unable to agree on a royalty rate, sparking a legal battle over seven patents owned by Ericsson and used by Samsung products. The technology involved is found in tablets, smartphones and other electronic devices. Six of the patents at issue are described as industry standards, and Ericsson was seeking a rate that it found fair for the industry.

After a year of litigation, the two companies announced that they have reached a settlement on Jan. 27, just prior to the release of judicial findings in one of the proceedings. The settlement agreement is a multi-year licensing deal in which Ericsson says it will receive a fair rate for the licensing of its GSM, UMTS and LTE standard technology. The settlement is expected to boost Ericcson's sales in the fourth quarter by $652 million. Samsung is still involved in an ongoing legal battle over patents with rival Apple.

While the cost of litigation may be high in some business disputes, the cost to revenue can be even higher. The failure of one company to live up to the terms of a contract could be grounds for a lawsuit. A lawyer who has experience in business litigation could investigate the claim and bring the lawsuit in civil court. This could result in damages for breach of contract, lost profits and even attorneys' fees in some cases.

Source: Bloomberg, "Ericsson Reaches Patent Deal With Samsung Ending Legal Disputes", Susan Decker and Adam Ewing , January 27, 2014

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