Ericsson and ZTE have agreed to drop patent infringement suits filed against each other in 2011 and signed a worldwide agreement for ZTE to have access to a number of Ericsson patents. The Chinese telecoms equipment maker has signed a royalty-bearing cross-licensing agreement that complies with Fair, Reasonable and Non-Discriminatory royalty compensation.

Ericsson’s chief intellectual property officer Kasim Alfalahi (pictured) said Ericsson’s 27,000 patents make up the strongest patent portfolio in the industry, meaning any company selling mobile devices or systems needs a licence from the company. “We have signed more than 90 patent agreements with different vendors worldwide. Now we can add ZTE to this group," he said.

The Swedish infrastructure company filed a lawsuit against ZTE in Germany, Italy and the UK in April 2011, accusing it of infringing patents related to GSM and UMTS technology. ZTE responded by saying it would begin patent invalidation procedures against Ericsson, calling for the Chinese State Intellectual Property Organisation to launch an investigation.

ZTE then reportedly filed a lawsuit against Ericsson in China saying its products violated several ZTE-held patents for core networks, GSM and 4G. The Chinese company requested that Ericsson cease its infringements and pay unspecified damages.

ZTE's shares rose 2.3 percent in Hong Kong on Friday following the news, according to Bloomberg. This followed the biggest decline for five months that took place the previous day.