Nokia and InterDigital IPR Litigation
From Nokia's SEC 20-F 2006 (just filed) page 111/112 (112/113) ...
nokia.com
>> In 1999, Nokia entered into a license agreement with InterDigital Technology Corporation and Interdigital Communications Corporation (together ‘‘IDT’’) for certain technology.
The license provided for a fixed royalty payment through 2001 and most favored licensee treatment from 2002 through 2006. In March 2003, IDT settled patent litigation with Ericsson and SonyEricsson and announced that it intended to apply the settlement royalty rates to Nokia under the most favored licensee provision, which would have resulted in Nokia allegedly owing over USD 500 million. Nokia disputed IDT’s contention. After an arbitration hearing was completed in January 2005, an award was issued that generally set royalty rates, which IDT publicly contended at that time imposed USD 232 to 252 million in royalty obligations on Nokia for the period of 2002 through 2006.
In January 2006, Nokia filed a notice of appeal to the Second Circuit Court of Appeals. During that time, the parties engaged in continued settlement discussions. In April 2006, Nokia and IDT resolved their contract dispute over the patent license terms originally agreed to in 1999 and the impact to Nokia of IDT’s licenses with Ericsson and SonyEricsson. The agreed upon settlement terms resolved the legal disputes related to 2G products, with Nokia obtaining a fully paidup, perpetual, irrevocable, worldwide license to all of IDT’s current patent portfolio, and any patents IDT may later acquire, for purposes of making or selling 2G products, including handsets and infrastructure. The settlement terms also resolved disputes related to all Nokia products up to the agreement date. The USD 253 million payment required under the settlement terms was in line with Nokia’s earlier provisions for this legal dispute. Further, the settlement terms also resolved a pending legal action in the United Kingdom involving IDT’s alleged 2G patents.
The IDT settlement terms did not address any prospective 3G license terms, however Nokia’s sale of 3G products was fully released thru the date of the settlement agreements. Additionally, IDT agreed not to initiate patent infringement claims against Nokia prior to January 1, 2007. Notably, Nokia and IDT currently have pending legal disputes in the United States and United Kingdom regarding IDT’s alleged 3G patents and certain Nokia patents declared essential to 3G, and the settlement terms did not have any impact on those pending disputes. Nokia will vigorously defend itself in these disputes. ###
Also on page 185 of the PDF (F-50)
>> The IPR provision is based on estimated future settlements for asserted and unasserted past IPR infringements. Final resolution of IPR claims generally occurs over several periods. This results in varying usage of the provision year to year. In 2006, usage of the provision includes an amount of EUR 208 million that was released against the settlement to InterDigital Communications Corporation. ###
- Eric - |
