JP Morgan Comments On Ericsson And Apple's IPR Lawsuits

Ericsson (ADR) ERIC and Apple Inc. AAPL recently filed IPR-based lawsuits against each other.

Sandeep Deshpande of JP Morgan on Wednesday commented in a note that the move is an attempt by Ericsson to monetize its IPR portfolio better. Apple is fighting back in court, indicating a similar situation could take place between Nokia NOK and Apple when their cross-licensing deal will expire in 2016. The analyst does add that Ericsson's “much more aggressive” stance on IPR is a positive for the stock.

“That Ericsson is taking legal action against Apple to get better royalty rates than in the pair's previous license deal, shows that Ericsson is being aggressive in monetizing its patent portfolio,” Deshpande wrote. “Thus, there is potential upside to Ericsson's IPR licensing revenue if it prevails in the lawsuit.”

Deshpande adds that in a worst-case outcome, Ericsson will likely still get the same royalties from Apple that it got in their expired licensing deal. On the other hand, Apple's lawsuit aims to get some pricing leverage with Ericsson, given Ericsson has no need for Apple technology.