HomeInsightsNokia and Interdigital settle; future battle looms

    Nokia and Interdigital settle; future battle looms


    Nokia and Interdigital have drawn a line under their disputes over 2G and 3G licenses, after Nokia agreed to pay Interdigital $253 million – roughly the amount decided on by the International Chamber of Commerce’s Court of Arbritration in autumn 2005.

    The resolution means Nokia is fully paid up on all 2G licenses from Interdigital, and is so in perpetuity. It also wipes the slate clean for 3G licenses up to the present day.

    However, the companies are still in negotiation over future 3G licenses, and many close to Interdigital see the resolution as clearing the decks for further battles on 3G.

    Interdigital claims that the 3G license fees up to this point, which were effectively thrown in for free into the 2G deal, were not that substantial, reflecting Nokia’s own sluggish sales of 3G devices. Nokia says that the agreement shows the worth of fighting “unrealistic expectations” of technology licencers.

    The agreement also has implications for Samsung, which is involved in a very similar dispute with Interdigital, albeit for lesser amounts. Interdigital clearly hopes that the Nokia example will persuade Samsung to go down a similar path.

    An Interdigital spokesperson said that the amount Nokia paid was “in line” with their expectations, and showed the resolve of the company in defencding its IPRs. Nokia painted the settlement as a climbdown for Interdigital from previous inflated demands.

    With Nokia also in dispute over ongoing patent licensing with Qualcomm (Qualcomm recently informed the markets there is a risk it may not renew licenses with Nokia after April 2007) the company clearly faces a period where it needs to sort out its licensing policy.

    We have tried repeatedly to speak to Nokia but it has been unable to put up a spokesperson.

    If you’re interested in the background to this dispute then follow the links below.