Accuses Finns of being overly-litigious
InterDigital Communications Corporation announced today that it will oppose Nokia’s recent motion to vacate or modify the binding Final Award rendered by the International Court of Arbitration of the International Chamber of Commerce (ICC) in June 2005. Following two and one-half years of discussions, discovery, testimony, and deliberations in this matter, Nokia has alleged, among other claims, that the majority of the arbitration panel reached a “totally irrational result.” Additionally, Nokia has continued its litigious approach toward resolving business issues with InterDigital by filing a new patent action in the United Kingdom last week. From the time Nokia was notified of its royalty obligations under its patent license agreement with the company, Nokia has filed eight separate legal actions involving InterDigital.
“In 1999, InterDigital entered into the original agreement with Nokia in good faith,” commented William J. Merritt, President and Chief Executive Officer of InterDigital. “Over the course of the past several years, InterDigital has systematically honored the agreement and when this dispute arose, we pursued resolution in a controlled manner with the sole objective of finding a sensible business outcome. Nokia has taken a different approach and has not complied with the terms of the Final Award, including missing the deadline set forth in the Final Award for payment of royalties for past sales. We are very confident that Nokia will fail in its efforts to have the Final Award vacated or modified and will pay the amounts due, either of their own accord or by court order.”
Mr. Merritt, further noted, “Nokia’s public statements about the arbitration and the Final Award are misleading. The arbitration process was measured and rigorous, affording both parties ample opportunity to present their respective positions. The majority, comprised of seasoned commercial litigators/arbitrators, wrote a comprehensive and well-reasoned decision addressing the relevant issues. The dissenting opinion, authored by the arbitrator selected by Nokia, has no legal effect on the enforceability of the Final Award.”
“Based on these facts, and the very limited basis available under the law for a court to vacate or modify a binding arbitration decision, InterDigital believes that any challenges to the Final Award are frivolous,” added Mr. Merritt. “Moreover, the purpose of parties selecting binding arbitration is to achieve finality in business disputes, and to do so in an expedited manner. Consistent with that purpose, any court proceeding to challenge a binding arbitration award is normally undertaken on a summary basis (i.e., no new trial is held), making the review process more streamlined and expedited than traditional U. S. District Court litigation.”
In July 2003, Nokia filed a request with the ICC for binding arbitration regarding Nokia’s royalty payment obligations for its worldwide sales of 2G and 2.5G products under the existing patent license agreement with InterDigital. On July 1, 2005, InterDigital announced the material findings made by the Arbitral Tribunal operating under the auspices of the ICC. In sum, two of the three arbitrators favored all but one of InterDigital’s positions on the interpretation of the rate-setting provisions in the patent license agreement between Nokia and InterDigital. Under the binding Final Award, the Tribunal has established royalty rates which are applicable to Nokia’s sales of covered products for the period beginning January 1, 2002 through December 31, 2006, and also established dates for payment of royalties on past sales.
On July 1, 2005, InterDigital initiated an enforcement action in the U. S. District Court for the Southern District of New York in order to convert the Final Award into a court judgment which would allow InterDigital, if necessary, to compel collection of the royalties due to InterDigital from Nokia under the Final Award. Collection ultimately could be compelled through a number of different judicial processes.
In a separate action on July 29, 2005, Nokia filed a claim in the United Kingdom High Court of Justice, Chancery Division, Patents Court against InterDigital Technology Corporation (ITC), a wholly-owned subsidiary of InterDigital Communications Corporation. Nokia’s claim seeks a Declaration that the importation, manufacture and sale of mobile phones and/or infrastructure equipment compliant with the 3GPP Standard TS 41.101 Release 5 without license from ITC does not require infringement of any of thirty-one of ITC’s UMTS European Patents registered in the UK, such that none of the patents are essential IPR for that standard. InterDigital believes the filing is without merit and intends to vigorously defend its position.