Ericsson seeks to cash in on patents

The company sees revenue opportunities as more products get wireless connections

As wireless access is added to new types of devices, Ericsson is reorganizing its licensing department in an effort to make more money from its patents, the company said on Thursday.

The Swedish telecommunication vendor's CEO Hans Vestberg wants to keep close tabs on the latest developments, and as part of its reorganization Ericsson's chief intellectual property officer Kasim Alfalahi will now report directly to Vestberg.

The company's IPR portfolio includes 27,000 granted patents. Today, any vendor that wants to use cellular connectivity in its products needs a license from Ericsson, which is offered under so-called fair, reasonable and non-discriminatory terms.

Licensing patents under those terms should be fairly straightforward. But that isn't always the case; in the Netherlands Samsung and Apple, as part of their global legal battle, are arguing in court over what fair and reasonable means.

Ericsson has largely stayed out of the telecom legal battles, but announced it had sued ZTE, which then counter-sued, in April last year. The case is still pending, according an Ericsson spokeswoman.

Patents have become a very valuable commodity in the telecommunications industry. For example, last year, Nortel sold 6,000 patents and patent applications for US$4.5 billion to a consortium consisting of Ericsson, Apple, EMC, Microsoft, Research In Motion and Sony, following a bidding war with Google.

Ericsson aims to grow its revenues from licensing its intellectual property portfolio beyond the 4.6 billion Swedish kronor ($663 million) net revenue generated in 2010.

On Thursday, Ericsson also said it had closed its $1.15 billion acquisition of Telcordia, which the company first announced in June last year.

The deal is meant to reinforce and expand Ericsson's position in the operations support systems (OSS) and business support systems (BSS) sector. These systems are used for network optimization and real-time charging, and as operators look for new ways to make money they have become more important.

Send news tips and comments to mikael_ricknas@idg.com

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Mikael Ricknäs

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