InterDigital Inc (IDCC)

[Paullee]

June 30, 2023
Via CM/ECF
The Honorable Joshua D. Wolson
U.S. District Court for the Eastern District of Pennsylvania
3809 U.S. Courthouse, Courtroom 3-B
601 Market Street
Philadelphia, PA 19106
Re: InterDigital Technology Corporation, et al. v. Lenovo Holding Co., Inc., et al.
C.A. No. 1:19-cv-01590-JDW
Dear Judge Wolson,
The parties provide the following update regarding the status of their UK proceedings:
On June 27, 2023, Mr. Justice Mellor, the trial court judge in the parties’ FRAND
proceedings before the High Court of Justice of England and Wales, issued his final Approved
Judgment and Order, both attached hereto. The Court's “Settled License” is appended to the
Judgment.
With respect to the mootness issue, InterDigital’s position, consistent with the position
articulated during the parties' March 22, 2023 status conference, is that all issues in the Delaware
case are—or will become—moot. InterDigital respectfully submits that any decisions on appeal
in the UK proceedings could have an impact on those issues, and therefore InterDigital believes it
would be premature to formally address mootness at this time. To avoid the unnecessary
expenditure of party and court resources, InterDigital proposes that this case be stayed in its
entirety.
Lenovo’s position is that InterDigital’s patent claims are now moot and should be
dismissed. Lenovo otherwise agrees that all other claims currently pending before this Court
should be stayed at this time.
As instructed in the Court’s March 23, 2023 order, Dkt. 313, the parties will notify the
Court when the UK proceedings have concluded and the final agreement between the parties has
been executed.
Respectfully submitted,
/s/ Neal C. Belgam
Neal C. Belgam (No. 2721)

[patopinion]

Question: The UK High Court ruled that IDCC had 3 patents that were valid and essential and then applied a rate of .175 per unit. Does the rate applied to the 3 patents represent what IDCC is entitled to charge for its entire patent portfolio? What if additional patents are litigated and deemed valid and essential then would that increase what IDCC could charge for its entire patent portfolio?

[TXDave]

I'm down to about half my original holdings (should have followed DR's lead and sold more in 2017), but that's just part of the 20+ year saga. Will probably lighten by half in the $100-120 range. Hold the rest. I've expected a buy out for so long, I can't seem to let it go. LOL

[zdog]

Same here, they could make the decision easier by raising the dividend.

[FISH21049]

I'm torn between selling a portion of my holdings and keeping it for the dividend.

OH, WHAT AM I TO DO !

[Hydro_gen]

Just curious - WHO here will be selling when we cross the $100 price point? The last time we did the bitching/whining/moaning was unbearable for those who did not take profits. Been years since I even visited or posted here and in full disclosure I sold "most" of my small position (compared to some heavy hitters here) at $83 years ago. Stay safe folks and Happy 4th of July! PEACE

[FISH21049]

ANOTHER o'reeno --- $97.02 reached this morning.

[vegas options]

Maybe someone found out that the company bought back 1M shares in May and June...

[vegas options]

xdx, it is from this morning as the volume today is 400 shares

[xdx]

Vegas, then it's not him, unless it was left over from prior night's close.

[vegas options]

Looks like 5 O'clock Charlie bought 300 shares at $98.50 this morning

[xdx]

Teecee, did Five o'clock Charlie get up early this morning for pre-market?

[macc14]

Don't pinch me!

[tnyellowtomcat]

All,

We in IDCC have low float, great earnings, a low P.E. and high short interest. We are in wireless and AI! I think IDCC is quite likely to have a run just like a similar company did a few years ago. The company? Universal Display (OLED). I almost bot OLED years ago but didn't. I had IDCC instead.

IDCC is now acting like OLED did back in 2017. Go to OLED and look at the chart! If past is prologue, we may be looking at $200 a share later this year!!

IMHO - Tomcat

[my3sons87]

Vegas drink what is available to you.

[vegas options]

Louis the 13th. I only get 2 buck chuck...

[my3sons87]

The “Louis the 13th” is excellent with every new high and oreeno.

[teecee56]

Vegas....he started with zero credibility....it hasn't gone up from there

[scooby5]

Reductions for when we close a ove $100? I have July 7th.

[Paullee]

InterDigital to appeal UK FRAND decision while Lenovo battle continues in China and US
Adam Houldsworth
29 June 2023
Two landmark global FRAND rate decisions by the High Court of England and Wales have disappointed SEP owners in recent months (see here and here).
Now InterDigital has been given permission to appeal one of those judgments, teeing up the UK’s first Court of Appeal dispute on the substance of global FRAND rate methodologies and providing hope to rights holders that a more SEP-friendly approach may be adopted by the higher court.
Moreover, InterDigital’s global SEP licensing fight with Lenovo continues to be fought in China and the US, despite the implementer’s undertaking to accept the rate set by the High Court in London. So the dispute appears to be far from over.
All this was revealed in an extensive follow-on decision handed down by the High Court this week. Dealing with several issues left unresolved in the first ruling, this opinion contains some other notable positives for InterDigital, which has been awarded an additional $46.2 million as part of a global SEP licence that the court has ordered Lenovo to sign. This represents the interest that the Chinese implementer must pay on the $138.7 million royalty the court has decided should have been paid for a global 3G-5G patent licence for the years 2007-2023.
Lenovo had argued that it is not obliged to pay interest to compensate the patentee for delays in payment. This, it said, was because the ETSI policy does not require it, because the $138.7 million sum was calculated in a way that it already accounts for any potential interest, and because InterDigital was found to be an unwilling licensor. However, Mr Justice Mellor rejected these points, awarding the patentee 4% interest compounded quarterly. This takes the value of the global licence to $184.9 million – a substantial increase.
InterDigital, however, was less successful on the subject of litigation costs, which tend to be awarded to the winning party in UK disputes. A substantial sum of money was at stake over this question: InterDigital spent £17.25 million on the FRAND portion of the UK litigation, whereas Lenovo has paid £14.27 million.
Despite the global per unit rate set by the court ($0.175) being substantially closer to Lenovo’s favoured rate of $0.16 than InterDigital’s $0.498, the patentee argued that it was the overall winner because the implementer was the one being forced to ‘write the cheque’. InterDigital had also needed to take Lenovo to trial to obtain a global licence agreement, it added, and to force the implementer to accept the court’s ruling.
However, Mellor J stated that he was “in no doubt that Lenovo are the overall winner of this FRAND trial”. Agreeing with Mr Justice Birss in Unwired Planet, he held that FRAND rate disputes are tariff-setting exercises. It matters, therefore, that the court largely sided with Lenovo on the subject of top-down checks and comparables analysis, and that it granted an award much closer to the implementer’s suggested licensing fee.
But despite ordering InterDigital to pay most of Lenovo’s costs, Mellor J circumscribed some specific outgoings that must be paid by the implementer. Lenovo must pay InterDigital’s costs relating to the questions of foreign law that the Chinese company raised then abandoned during trial. It must also cover the patentee’s outgoings relating to the dispute over interest payments, Mellor J ruled. The breakdown of these sums will need to be subjected to detailed assessment if an agreement cannot be reached.
The follow-on decision also throws light on the nature of the parties’ broader global dispute. Though the UK court’s decision concerns a global licence rate and Lenovo has undertaken to accept the ruling, the companies continue to fight it out in China and the US.
A trial at the US District Court for the District of Delaware is scheduled for 4th December this year. This will consider InterDigital’s claim that Lenovo is infringing seven of its 3GPP SEPs as well as Lenovo’s antitrust counterclaim which, among other things, seeks “a refund for any overpayment for a licence to US Patents based on InterDigital’s UK action”.
Lenovo is also challenging the outcome of the UK court’s global FRAND decision in Chinese proceedings before the Beijing Intellectual Property Court, which it is asking to set a FRAND rate for the Chinese portion of InterDigital’s portfolio.
In fact, Lenovo has told the Beijing court that its decision may have an impact on the rate set by the UK courts. This despite the fact Lenovo abandoned its argument that the UK-set licence should contain an adjustment clause (to factor in subsequent US and Chinese decisions) during the High Court trial.
It also transpires that Lenovo had once again reversed its position on this matter in UK proceedings, asking Mellor J to include an adjustment clause in the global licence, allowing royalties to be changed in accordance with future decisions elsewhere.
It is clear, Mellor J stated, “that Lenovo does intend to maintain their attacks on the Judgment, the Licence and to undermine its Undertaking to this Court”. He refused to include an adjustment clause in the licence that Lenovo must now sign. However, Mellor J continued, “it is for the US and Chinese Judges to regulate the proceedings which are before them, not me”. So the global licence set in London may not ultimately be the final word on the parties’ agreement, if either party can persuade other courts to intervene.
Even more interesting is that Mellor J has granted InterDigital permission to appeal – and Lenovo to counter-appeal – his FRAND decision.
InterDigital had expressed its intention to challenge the ruling on several grounds. These include that the rate Mellor J derived from the LG 2017 licence ought to have factored in the sub-FRAND rates paid on past sales in that agreement, and that the finding of unwillingness against it failed to consider its offer of third-party arbitration.
These arguments were dismissed as unlikely to succeed, but Mellor J permitted an appeal to seek guidance on several points of principle relating to his ruling. These include whether national limitation periods have a role to play in rate-setting; whether volume discounts are justified; whether it is appropriate for the court to seek to discourage hold-out; and whether it would be discriminatory against Lenovo to apply the kinds of discounts hitherto applied by InterDigital.
Lenovo, for its part, has been allowed to appeal the award of royalties from before the six-year limitation period.
This is good news for the patent community, especially SEP owners, because it promises further guidance on the principles according to which global FRAND rate decisions will be made in the UK.
Such guidance is much needed because of the dearth of existing case law: only three such decisions have yet been made by the English High Court and the Court of Appeal has not made a detailed judgment on methodological rate-setting questions.
https://www.iam-media.com/article/interdigital-appeal-uk-frand-decision-while-lenovo-battle-continues-in-china-and-us?utm_source=InterDigital%2Bto%2Bchallenge%2BUK%2BLenovo%2BFRAND%2Bdecision&utm_medium=email&utm_campaign=IAM%2BDaily

[vegas options]

He would do it only on valuation.

[badgerkid]

Vegas, wouldn't it make more sense for Tai/BofA to stay pat on his recommendation until updated guidance comes out? Tai would risk looking foolish with any change in his recommendation at this time (and I'm assuming all of their private clients were given a heads up prior to the surprise change from neutral to buy). I know short interest is significant, but who exactly is short?

Should we be expecting updated guidance from the company prior to earnings? How and when will the awards and interest be recognized? Is the future income from A.I. able to be estimated at this time? Is there another surprise licensing deal in the works? Has the company bought back more shares? Are there any suitors who want to take this company private or acquire it for all of it's IP?

Any downgrade at this time would seem to be agenda driven and not necessarily supported by the facts (though valuation is as good a reason as any without updated guidance), but that is the game played by some of the analysts who are merely shills or mouthpieces. IDCC was certainly not a game for the faint of heart over these past many years, but they certainly have impressed with their most recent history in how they've managed the company.

Best of luck Vegas.

Badger

[vegas options]

Do not be surprised if the B of A analyst puts out a sell on IDCC due to valuation as he was the one that got a lot of the shorts into it.

[FISH21049]

Another O'reeno at $96.04 . . . . keep it going !

[vegas options]

Volume picking up. Size of trades increasing. I believe that some of the shorts have had enough pain and they will contribute to the pain for those left...

[xdx]

Wondering if Houston still plans that “Houston 100 Party” like Reece did in Jersey?

[FISH21049]

My Yahoo shows we hit a 95 O'reeno at $95.05. It has since backed down.

[TXDave]

This is fun. EOM

[teecee56]

Oh boy ..pre mkt is all steamed up.....rock n roll hoochie coo!!!

[Gamco]

Data_Rox - Thanks for stopping by. After 20+ years on IHub and many more on Raging Bull, it reminds me of going to a family reunion and trying to recall how everyone there fits on the family tree. Take care.

[Data_Rox]

Loving the underlying fundamentals and way the stock is moving!

Also fun to see familiar screen names as well as people I met through the years still here - did I actually see Bill D pop in?!? Some blasts from the past for sure from our gatherings in Houston, NJ, SoCal and KoP - fond memories for sure, and paying respects to those we lost along the way.

Now if y’all could get the company to raise the dividend…that would be very welcome!

BLTA!

R

[teecee56]

Five o clock charlie...just made a new high!!!...hi hi hi hi...hi!!!...I don't think I've ever had as much fun with idc...as I'm having now....and it's got nothing to do with money!!!!!

[my3sons87]

Oreos are great with milk (milk and cookies). But, oreenos go better with Louis Thirteen.

[my3sons87]

Investtwmp take the short slanted article you posted to the Lenovo board. We are not interested.

Lenovo lost the IDCC infringement case. And therefore has to pay up for past use and interest. And if and when IDCC wins theUK appeal the amount/rate and interest owed by Lenovo will also rise.

[investtemp]

Lenovo Named 'Overall Winner' In FRAND Costs Ruling
By Alex Baldwin · Listen to article
Law360, London (June 27, 2023, 9:26 PM BST) -- Chinese technology giant Lenovo has walked away the "overall winner" in a London court judgment on costs in its long-running dispute with wireless and video technology company InterDigital over fair, reasonable and nondiscriminatory licensing rates for wireless patents.

Although the High Court ordered Lenovo Group Ltd. Tuesday to pay an additional 4% interest on top of $138 million sum to license InterDigital Technology Corp.'s standard-essential patents and held that Lenovo "lost" on "foreign law" matters in the proceedings, there was "no doubt" that Lenovo came out on top in the trial and that InterDigital should bear the rest of the costs in the licensing proceedings, Judge James Mellor ruled.

As Lenovo had alleged it should not have to pay interest, Judge Mellor ordered the company to pay InterDigital's legal costs related to the "interest issues. But, the judge added, "The fact that Lenovo will be 'writing the cheque' and a sizeable cheque at that cannot, in my view, convert InterDigital into the winner of the FRAND trial."

InterDigital's suit against Lenovo accused the Chinese company of infringing five of its telecommunication patents, arguing Lenovo used InterDigital's patented technology in its products without a proper license.

The English courts first ruled that three of the five patents were valid and essential, then moved on to determining whether terms of the licensing agreement offered by InterDigital and Lenovo were fair, reasonable and nondiscriminatory, or FRAND.

InterDigital proposed an offer that would see Lenovo pay about $337 million for a six-year license, whereas Lenovo said it should pay $80 million for the same term, with a 15% leeway to account for sales of its devices.

But Judge Mellor ruled in March that neither InterDigital nor Lenovo's offers were FRAND, and said the court should set the rate, ordering Lenovo to pay a lump sum of $138.7 million, which included past sales of its products.

However, Judge Mellor did not determine in the March ruling whether Lenovo should pay interest on its sales.

InterDigital contended that Lenovo should pay at least a 4% interest rate for its sales, a figure that it says Lenovo had previously agreed to in a draft license agreement. It also floated a higher 5-10% interest rate based on expert evidence.

Lenovo argued the court did not have a jurisdiction to award interest in this "contractual" claim. It added that granting interest payments would encourage licensors to "hold out" from setting FRAND terms to secure interest payments down the line.

In Tuesday's judgment, Judge Mellor held that the 4% rate previously agreed upon by the parties was suitable and found no justification to set a higher rate.

The judge also gave InterDigital permission to appeal two points of his FRAND judgment concerning whether he should have taken into account the "subjective" view on the value of the patent license, and whether interest should be awarded in the sum "derived from the comparables analysis."

InterDigital's Chief Legal Officer Josh Schmidt welcomed the court's "careful consideration," decision to award interest and granting permission to appeal these aspects of the ruling.

The court also gave Lenovo the go-ahead to appeal the court's decision on whether limitation periods "have a role to play in the relationship between willing licensor and willing licensee."

John Mulgrew, Lenovo's vice president, deputy general counsel and chief intellectual property officer, also cheered the decision, calling the case a "broader, landmark victory for the technology industry and the customers we serve."

InterDigital was represented by Adrian Speck KC, Mark Chacksfield KC and Edmund Eustace of 8 New Square, instructed by Gowling WLG.

Lenovo was represented by Daniel Alexander KC of 8 New Square and James Segan KC of Blackstone Chambers, instructed by Kirkland & Ellis International LLP.

The case is InterDigital Technology Corp. and others v. Lenovo Group Ltd. and others, case number HP-2019-000032, in the High Court of Justice of England and Wales.

[FISH21049]

loophole: IF we still have a possible action against nokia, I wish one of our analysts would raise this question on a conference call.

Wouldn't a footnote or something in the financial statements state something about any future claims against past infringement?

Too bad we don't have Tom Carpenter or someone like him we could call on to ask management that question. Maybe we could ask the idiot that had us dead and buried (Bank of America?) to raise this question ! ! !

[Monterey2000]

Loop It’s good that you are still here to remind us of the finer points of those struggles during what were at least very uncertain times. I have been around since the pre-MOT decision. There was also discussion of some company being the indemnifier in wireless IP disputes. As always, thanks for your input.

[Monterey2000]

$94 Oreenos!!

[loophole73]

Some were not around when the 3g standards body was created. Many said it was a product of a group known as MENS (Mot, Ericy, Nok and Siemens). Nok was the top producer during the era and small companies making contributions of their own IPR were afraid to fight with this big shot for fear of retaliation via boycotts in acceptance in the final standards.
MO
loop

[Gamco]

InterDigital (IDCC)

Jefferies analyst Mark Lipacis maintained a Buy rating on InterDigital yesterday and set a price target of $106.00. The company’s shares closed last Tuesday at $92.37, close to its 52-week high of $93.32.

According to TipRanks.com, Lipacis is a top 25 analyst with an average return of 30.3% and a 72.5% success rate. Lipacis covers the Technology sector, focusing on stocks such as Advanced Micro Devices, Lattice Semiconductor, and Smart Global Holdings.

Currently, the analyst consensus on InterDigital is a Strong Buy with an average price target of $108.33.

[Monterey2000]

Loop...thanks...eom

[loophole73]

Pnokio sold 3 billion 3g units that has never been litigated. According to IDCC they had reached some sort of agreement requiring a later determination. The 2g was settled through arbitration. If the matter is still alive as Merritt and Shay represented, then Pnokio and IDCC can now move forward regarding the FRAND terms necessary to determine a fair and reasonable amount of royalty for the 3g sales made by Pnokio.
MO
loop

[Monterey2000]

Loop, not following, are you talking about the Pnokio of yester year? How so? I thought the Pnokio case was lost and done years ago.

[loophole73]

Even at the .175 rate, Pnokio should owe around 525 million unless our former management somehow fumbled the ball. Tack on interest and we have a monster win.
MO
loop

[Gamco]

June 28 (Reuters) - InterDigital Inc: Jefferies raises target price to $106 from $90

[my3sons87]

Monterey, at this time it is merely puffery on Lenovo’s part. The appeal has to play out.

[Monterey2000]

Lenovo apparently has no fear of IDCC’s appeal of the license rate.

[Paullee]

Lenovo Declared “Overall Winner” in InterDigital FRAND case
27 June 2023
Lenovo today announced that the UK High Court has declared Lenovo undoubtedly the overall winner in ongoing litigation with InterDigital regarding license rates for 3G, 4G, and 5G patents. The Court is requiring InterDigital to pay the bulk of Lenovo’s legal costs for the FRAND (Fair, Reasonable and Non-discriminatory) case.

Today’s judgment further reinforces Lenovo’s continued commitment as a willing licensee and validates the license rate Lenovo advocated for in litigation.

Lenovo’s John Mulgrew, Vice President, Deputy General Counsel & Chief Intellectual Property Officer, welcomes the decision as follows:

“Lenovo’s clear win in this FRAND rate-setting case is a broader, landmark victory for the technology industry and the customers we serve. The Court’s determination that InterDigital’s global cellular royalty rate should be US$0.175 per unit provides full transparency in the face of InterDigital’s supra-FRAND offers and behavior as an unwilling licensor. We are pleased that the UK Court’s judgment facilitates the proliferation of affordable innovation to customers around the world.”

Lenovo’s earlier comments on the FRAND case can be found in this statement.
https://news.lenovo.com/pressroom/press-releases/lenovo-declared-overall-winner-in-interdigital-frand-case/
The full judgment is available here on the National Archive website under case number HP-2019-000032.
https://caselaw.nationalarchives.gov.uk/

[teecee56]

I'm at a loss at what the shorts exit strategy is...it's not like we're some overblown rookie who hasn't seen his share of bad days...were talking about 50 pct cash as a pct of mkt value...new stuff coming on line....26 myn shares outstanding...and the tender just took out just about all the sellers...there are better opportunities to be short at this point....close your eyes and shoot an arrow at the top 5...you're bound to be more successful on the short side...no disrespect to da shortz!!!!

[vegas options]

Teecee56, open interest has not expanded. I am down to my last 10 calls. There were a lot of times in the last 6 months that I had about half of the original call open interest except in April where they bought 10000 calls and those expired. The calls I had were ITM.