The licensing of standard essential patents funds reinvestment into research and development (R&D) and facilitates global collaboration and commercialization for best-in-class technological standards.
In the telecoms industry, licensing allows new entrants into the market on fair and reasonable terms. This is different to some industries, where patents primarily exclude other companies from a market. Ericsson has one of the largest portfolios of granted patents and more than 100 licensing agreements signed to date.
Vitally, licensing of Ericsson’s patent portfolio generates a return that funds future research and development. Ericsson has 24,000 R&D employees and invests on average around USD 5 billion into the area annually. Patent revenues have allowed Ericsson to invest further into the research and development of next-generation mobile technologies, as well as complementary technologies such as video encoding and location-based services. Notably, Ericsson’s investments in the advancement of 5G technology will revolutionize the industry with smart vehicle and transport, critical services and infrastructure control, and human-machine interaction.
Licensing revenue not only leads to investment in research, but to collaborative development of a best-in-class global standard. Since the early days in 4G, Ericsson has almost tripled its annual contributions to the 3rd Generation Partnership Project (3GPP) – a standard development organization – from approximately 2,000 contributions in 2006 to approximately 6,000 contributions in 2016. Increased contributions to 4G evolution and 5G are leading to a robust standard with increased performance and flexibility for next-generation products and services.
Ericsson is committed to offering licenses to its standard essential patents* on fair, reasonable, and non-discriminatory (FRAND) terms and conditions. Through FRAND licensing, Ericsson gives other companies access to its standard essential technology, thereby lowering barriers to entry into the global telecoms market, increasing competition, and lowering prices for consumers.
Licensing also enables the wireless ecosystem to flourish for generations to come, levelling the playing field. By allowing companies to build on the proven technology of other market players, new ideas are constantly being created and tested, giving consumers access to the products and services resulting from this continuous innovation.
Read more about Ericsson's patents and licencing and how we are investing in technology innovation.
*A standard essential patent is a patented invention that is necessary to comply with a technical standard. Ericsson offers standard essential patents for licensing on FRAND terms.