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InterDigital (IDCC) Secures Patent License Deal From Google
July 03, 2024 — 06:51 am EDT
Written by Zacks Equity Research for Zacks ->
InterDigital, Inc. IDCC has signed a significant patent license agreement with Google for an undisclosed amount. The new agreement covers a range of devices, including Pixel smartphones, Fitbit wearables and other consumer electronics, integrating InterDigital’s cellular wireless, Wi-Fi and HEVC video patented technologies.
The partnership is set to bolster InterDigital’s position in the tech industry. By licensing its innovative technologies to Google, the company ensures its continued influence and relevance in the rapidly evolving landscape of consumer electronics. The agreement also underscores the importance of InterDigital’s technologies across various consumer devices.
The relevance of this deal extends beyond the immediate benefits for both companies involved. For InterDigital, it signifies a robust validation of its R&D efforts and strengthens its market presence. For Google, the deal implies access to cutting-edge technology that can enhance its product offerings, from smartphones to wearables and beyond.
From an industry perspective, the partnership highlights the critical role of innovation and intellectual property in driving technological advancements. As the market for connected devices continues to grow, agreements like this demonstrate the essential nature of collaboration between tech giants and specialized R&D firms.
InterDigital’s commitment to licensing its broad portfolio of technologies to wireless terminal equipment makers, which allows it to expand its core market capability, is laudable. It has leading companies, such as Huawei, Samsung, LG and Apple, under its licensing agreements. Consequently, the company expects to generate solid recurring revenues from the patent licensing business in the forthcoming quarters as well.
IDCC’s global footprint, diversified product portfolio and ability to penetrate different markets are impressive. Apart from the company’s strong portfolio of wireless technology solutions, the addition of technologies related to sensors, user interface and video to its offerings is likely to drive significant value, considering the massive size of the market it licenses. Furthermore, the company remains committed to pursuing acquisitions to drive its product portfolio and boost organic growth.
The company is focused on pursuing agreements with unlicensed customers in the handset and consumer electronics markets. InterDigital aims to become a leading designer and developer of technology solutions and innovation for the mobile industry, IoT and allied technology areas by leveraging its research and development capabilities, technological know-how and rich industry experience. At the same time, it intends to enhance its licensing revenue base by adding licensees and expanding into adjacent technology areas that align with its intellectual property position.
The stock has gained 23.2% over the past year compared with the industry’s growth of 40.4%.
jealmc79 - I wonder if all of the bonds were surrendered for redemption by close of business today (6/28/24). If so, would that require an SEC filing as a material event? I'm anxious to know the number of shares outstanding after all of these transactions.
bobsil - Somewhere I read that the head appeals judge typically writes his decisions relative soon (whatever that means?) after the conclusion of his hearings. But in this case, there were two other judges that also will rule. So I believe that all three judges will need to be in agreement before any decision is announced. Basically, I have no idea how long it may require.
IDCC short interest as of 6/14/24 @ 4.46 million shares, up from 4.40 million as of 5/31/24.
Intel Demonstrates First Fully Integrated Optical I/O Chiplet
Business Wire
Wed, Jun 26, 2024, 11:00 AM ED
Intel’s optical compute interconnect chiplet is expected to revolutionize high-speed data processing for AI infrastructure.
SANTA CLARA, Calif., June 26, 2024--(BUSINESS WIRE)--What’s New: Intel Corporation has achieved a revolutionary milestone in integrated photonics technology for high-speed data transmission. At the Optical Fiber Communication Conference (OFC) 2024, Intel’s Integrated Photonics Solutions (IPS) Group demonstrated the industry’s most advanced and first-ever fully integrated optical compute interconnect (OCI) chiplet co-packaged with an Intel CPU and running live data. Intel’s OCI chiplet represents a leap forward in high-bandwidth interconnect by enabling co-packaged optical input/output (I/O) in emerging AI infrastructure for data centers and high performance computing (HPC) applications.
"The ever-increasing movement of data from server to server is straining the capabilities of today’s data center infrastructure, and current solutions are rapidly approaching the practical limits of electrical I/O performance. However, Intel’s groundbreaking achievement empowers customers to seamlessly integrate co-packaged silicon photonics interconnect solutions into next-generation compute systems. Our OCI chiplet boosts bandwidth, reduces power consumption and increases reach, enabling ML workload acceleration that promises to revolutionize high-performance AI infrastructure."
--Thomas Liljeberg, senior director, Product Management and Strategy, Integrated Photonics Solutions (IPS) Group
What It Does: This first OCI chiplet is designed to support 64 channels of 32 gigabits per second (Gbps) data transmission in each direction on up to 100 meters of fiber optics and is expected to address AI infrastructure’s growing demands for higher bandwidth, lower power consumption and longer reach. It enables future scalability of CPU/GPU cluster connectivity and novel compute architectures, including coherent memory expansion and resource disaggregation.
Why It Matters: AI-based applications are increasingly deployed globally, and recent developments in large language models (LLM) and generative AI are accelerating that trend. Larger and more efficient machine learning (ML) models will play a key role in addressing the emerging requirements of AI acceleration workloads. The need to scale future computing platforms for AI is driving exponential growth in I/O bandwidth and longer reach to support larger processing unit (CPU/GPU/IPU) clusters and architectures with more efficient resource utilization, such as xPU disaggregation and memory pooling.
Electrical I/O (i.e., copper trace connectivity) supports high bandwidth density and low power, but only offers short reaches of about one meter or less. Pluggable optical transceiver modules used in data centers and early AI clusters can increase reach at cost and power levels that are not sustainable with the scaling requirements of AI workloads. A co-packaged xPU optical I/O solution can support higher bandwidths with improved power efficiency, low latency and longer reach – exactly what AI/ML infrastructure scaling requires.
As an analogy, replacing electrical I/O with optical I/O in CPUs and GPUs to transfer data is like going from using horse carriages to distribute goods, limited in capacity and range, to using cars and trucks that can deliver much larger quantities of goods over much longer distances. This level of improved performance and energy cost is what optical I/O solutions like Intel’s OCI chiplet emerging bring to AI scaling.
How It Works: The fully Integrated OCI chiplet leverages Intel’s field-proven silicon photonics technology and integrates a silicon photonics integrated circuit (PIC), which includes on-chip lasers and optical amplifiers, with an electrical IC. The OCI chiplet demonstrated at OFC was co-packaged with an Intel CPU but can also be integrated with next-generation CPUs, GPUs, IPUs and other system-on-chips (SoCs).
This first OCI implementation supports up to 4 terabits per second (Tbps) bidirectional data transfer, compatible with peripheral component interconnect express (PCIe) Gen5. The live optical link demonstration showcases a transmitter (Tx) and receiver (Rx) connection between two CPU platforms over a single-mode fiber (SMF) patch cord. The CPUs generated and measured the optical Bit Error Rate (BER), and the demo showcases the Tx optical spectrum with 8 wavelengths at 200 gigahertz (GHz) spacing on a single fiber, along with a 32 Gbps Tx eye diagram illustrating strong signal quality.
The current chiplet supports 64 channels of 32 Gbps data in each direction up to 100 meters (though practical applications may be limited to tens of meters due to time-of-flight latency), utilizing eight fiber pairs, each carrying eight dense wavelength division multiplexing (DWDM) wavelengths. The co-packaged solution is also remarkably energy efficient, consuming only 5 pico-Joules (pJ) per bit compared to pluggable optical transceiver modules at about 15 pJ/bit. This level of hyper-efficiency is critical for data centers and high-performance computing environments and could help address AI’s unsustainable power requirements.
About Intel’s Leadership in Silicon Photonics: As a market leader in silicon photonics, Intel leverages more than 25 years of internal research from Intel Labs, which pioneered integrated photonics. Intel was the first company to develop and ship silicon photonics-based connectivity products with industry-leading reliability at high volume to major cloud service providers.
Intel’s main differentiator is unparalleled integration using hybrid laser-on-wafer technology and direct integration, which yield higher reliability and lower costs. This unique approach enables Intel to deliver superior performance while maintaining efficiency. Intel’s robust, high-volume platform boasts shipping over 8 million PICs with over 32 million integrated on-chip lasers, showing a laser failures-in-time (FIT) rate of less than 0.1, a widely utilized measure of reliability that represents failure rates and how many failures occur.
These PICs were packaged in pluggable transceiver modules, deployed in large data center networks at major hyperscale cloud service providers for 100, 200, and 400 Gbps applications. Next generation, 200G/lane PICs to support emerging 800 Gbps and 1.6 Tbps applications are under development.
Intel is also implementing a new silicon photonics fab process node with state-of-the-art (SOA) device performance, higher density, better coupling and vastly improved economics. Intel continues to make advancements in on-chip laser and SOA performance, cost (greater than 40% die area reduction) and power (greater than 15% reduction).
What’s Next: Intel’s current OCI chiplet is a prototype. Intel is working with select customers to co-package OCI with their SOCs as an optical I/O solution.
Intel’s OCI chiplet represents a leap forward in high-speed data transmission. As the AI infrastructure landscape evolves, Intel remains at the forefront, driving innovation and shaping the future of connectivity.
More Context: Intel Silicon Photonics (Intel.com)
About Intel
Intel (Nasdaq: INTC) is an industry leader, creating world-changing technology that enables global progress and enriches lives. Inspired by Moore’s Law, we continuously work to advance the design and manufacturing of semiconductors to help address our customers’ greatest challenges. By embedding intelligence in the cloud, network, edge and every kind of computing device, we unleash the potential of data to transform business and society for the better. To learn more about Intel’s innovations, go to newsroom.intel.com and intel.com.
© Intel Corporation. Intel, the Intel logo and other Intel marks are trademarks of Intel Corporation or its subsidiaries. Other names and brands may be claimed as the property of others.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240626986416/en/
Contacts
Laura Stadler
1-619-346-1170
laura.stadler@intel.com
sinceIMM- Sorry, but I have no "insightful commentary" to offer concerning the good question you bring to the forum. I haven't been watching the options action as closely as I used to and don't know how many contracts were in the money for expiration on Friday. Volume of 2.04 million shares changing hands on Friday must be related to both options active together with the convertible bonds eligible for exchange this month. Also, at play are the warrents that IDCC controls as a hedge against dilution, and in my opinion, there is not enough information available to really understand how they function. [Sure could use input from Teecee56 about this].
Until the next quarterly SEC Q filing, I'm not sure how to fill in the blanks, like:
* Have all of the convertible bonds been exchanged? [technically the bond holder has untill maturity to surrender the bond but due to the difference in the coupon rate and current corporate interest rates that are available now I would imagine all of the bonds will be submitted by the end of June].
* Have all of the warrents that IDCC owns been exercised? How many remain to be exercised, and how long does InterDigital have to use any remaining warrents?
* Has InterDigital replaced the converted bonds with any new types of debt, such as a line credit or a new bond issue?
* What is the remaining cash balance in the authorized stock buyback?
The third and fourth quarters for InterDigital hold a few wildcards, like:
* Lenovo appeal ruling
* Samsung arbitration finalized
* Avanci/ Tesla litigation
* Ublox litigation
* Oppo litigation
* Sony partnership - Are more license agreements in the pipeline?
MirageWitch75 - Thank you for posting about Teecee56. He was kind to the shareholders of IDCC and generous to share his investment experience. I attended 3 Annual Stockholders Meetings over the years, and TeeCee was at all three. I still owe him a drink. Rest in peace.
French chip designer Sequans is looking to recover after the failed takeover bid by Renesas Electronics earlier this year.
Sequans is cutting its R&D to recover from the failed takeover bid by Renesas to focus on an IoT Reduced capacity (RedCap) chip.
The takeover bid failed as a result of issue over debt, and the company has frozen debt repayment to Lynrock Lake, Nokomis and Renesas, until August 26.
“We have made significant progress on multiple fronts, beginning with the extension of our standstill agreements with our debt holders until the end of August and the signature of a $15 million licensing agreement for our Monarch2 platform with a new partner,” said Georges Karam, CEO of Sequans.
“Additionally, we are optimizing our R&D expenses by suspending the development of our 5G fixed wireless product to focus on low-power 5G for massive IoT applications, specifically RedCap and eRedCap. Furthermore, we are making progress in discussions for a strategic transaction that would dramatically improve our balance sheet.”
This follows several loss making quarters. Revenue was $6.0 million, an increase of 26.3% compared to the fourth quarter of 2023 but down 49.3% on the first quarter of 2023. The operating loss was $8.5 million compared to operating loss of $12.8 million in the fourth quarter of 2023 and an operating loss of $4.0 million in the first quarter of 2023.
To cut costs, Sequans has suspended the development of its 5G Taurus product for Fixed Wireless Access applications. The shift to RedCap and eRedCap is expected to significantly reduce R&D expenses as part of the Company’s plan to achieve break-even in 2025.
Extending the debt maturities grants the Company additional time to secure a long-term solution and negotiate a strategic transaction that serves the interests of all its stakeholders, says the company.
Sequans announced today a $15m manufacturing licensing agreement for its Monarch2 LTE platform with a leading technology company. The deal includes an initial payment of $15 million, with the opportunity for additional revenue in subsequent years.
The agreement grants the license partner the right to manufacture and market the Monarch 2 chip under their brand name.
Cutting the Taurus project will reduce revenue recognition from the license agreement with Sequans’ Chinese strategic partner by $10m this year, but should be offset by revenue from the Monarch2 manufacturing license agreement.
“We are pleased to enter into this licensing agreement with a leading technology company, which underscores the exceptional value of our Monarch 2 technology for massive IoT cellular applications,” said Karam.
“This partnership not only expands our revenue potential but also creates significant mutual benefit for both organizations and paves the way for future collaborative opportunities. In addition to our product offering, Sequans has a proven track record of generating revenue through licensing agreements, and we intend to enhance and expand this strategy.”
Sequans confirms that it continues to be in active discussions for a long-term strategic transaction that would address its debt maturities and significantly strengthen its balance sheet.
www.sequans.com
https://www.eenewseurope.com/en/sequans-cuts-rd-to-recover-from-failed-takeover-bid/
I watched most of the appeal and found it to be very interesting. Although I may be mistaken, both Liren Chen [CEO] and Doug Hutcheson [Chairman] were in attendance for the entire proceeding. In general, my impression is the Judges were readily satisfied with the concise answers that IDCC's counsel provided to their questions; as opposed to the Judges responses to Lenovo's counsel's ramblings. In summary, I would expect IDCC to receive substantial additional funds whether they be designated royalties or interest. JMHO
UK Court of Appeal’s FRAND ruling will signal London’s role in SEP litigation
In an unusually long and complex appeal hearing, the UK Court of Appeal heard the FRAND rate dispute between InterDigital and Lenovo last week. The court's upcoming ruling will be a landmark for the UK's position in the global SEP dispute. But the UK patent courts have other cases in the pipeline.
19 June 2024 by Mathieu Klos
“Thank you for your detailed and interesting submissions,” presiding judge Richard Arnold could hardly have bid a more sober farewell to the barristers and solicitors representing InterDigital and Lenovo last Friday afternoon. But experienced patent judge Arnold is said to have a very sober style.
After five days of intensive hearings in room 63 of the venerable UK Court of Appeal, all 21 lawyers and judges present will have been glad to start the weekend. Usually patent hearings at the Court of Appeal last for up to two days. But the appeal against High Court judge James Mellor’s judgment in InterDigital vs. Lenovo not only concerned the calculation of FRAND rates, but also London’s future position in global SEP litigation.
Global significance
Mobile communications patents and the associated licences are a global billion-dollar business. When SEP holders and implementers cannot agree on a licence rate covering the important SEPs for 3G, 4G and 5G, for example, they often end up in court. In such cases, patent courts in the US, UK, China and Germany aim to provide clarity, usually playing a central role in these battles. It is not yet clear what role the new Unified Patent Court, which has now received a number of SEP lawsuits, will play in the future.
Up to now, the UK High Court is the only court in the world to have set a global FRAND rate with judge Colin Birss’ landmark ruling in Unwired Planet vs. Huawei.
Following the Unwired Planet ruling, SEP holders seeking to enforce a favourable FRAND rate regarded London as particularly attractive. The tables were turned, however, when judge James Mellor handed down his ruling in the dispute between InterDigital and Lenovo last March.
The case concerned a 3G, 4G and 5G portfolio licence and it was the first time the High Court judge was able to apply the Birss ruling. For this reason, the patent community is closely following the case.
Independent judges panel
Mellor’s judgment favoured the implementer. His decision on FRAND-rate setting saw the court order Lenovo to pay a FRAND rate of $138.7 million. The judgment also declared both parties’ previous offers as non-FRAND. Later in 2023, Mellor released two further decisions in which he declared Lenovo the “overall winner” of the FRAND trial.
Unsatisfied with the judgment, however, both InterDigital and Lenovo subsequently lodged appeals. The Court of Appeal combined both appeals (case IDs: CA-2023-001492 for InterDigital and CA-2023-001489 for Lenovo) and a panel featuring judges Richard Arnold and Christopher Nugee held the hearing last week. Colin Birss also sat on the bench as the third judge.
On 10 June, the panel opened the hearing just as soberly as it would end five days later — with a bow to the lawyers present and the British Crown. Internationally renowned UK patent judge Arnold took the lead. He has heard countless patent cases, though he has not yet had the chance to adjudicate in an SEP case. However, he is on the panel in the Court of Appeal case on willingness between Optis and Apple.
Thanks in part to his Unwired Planet ruling, Colin Birss is one of the best-known UK patent judges. He is also an advocate of the UPC and many considered him a top candidate for the UPC Court of Appeal.
Christopher Nugee
Richard Arnold, High Court, London, patent
Richard Arnold
Judge Colin Birss, IPEC, UK High Court
Colin Birss
Christopher Nugee, on the other hand, has an extensive commercial background, rooted in property and business law. However, Nugee has previously ruled on patent cases alongside Arnold, such as on the validity of Bristol-Myers Squibb’s apixaban patent in 2023 and the heat-not-burn e-cigarettes battle between BAT and Philip Morris.
InterDigital goes first
London lawyers describe the three judges as “extremely competent” and “intellectually independent”. In any case, the three judges were well prepared for the hearing and did not shy away from asking questions. They were clearly unimpressed by the fact that the case involved balance sheets, licence agreements and the calculation of complicated rates from licences that InterDigital had previously concluded with other implementers.
As the hearing began, InterDigital’s legal team went first. Barrister Adrian Speck from 8 New Square supported by Mark Chacksfield and Tom Jones presented InterDigital’s arguments. A Gowling WLG team around Alexandra Brodie, Michael Carter and Olivia Nimmo instructed the barristers. All three judges put questions to Adrian Speck regarding InterDigital’s appeal.
Lenovo responds
Lenovo then presented its case from Tuesday until Thursday. Lenovo’s barristers Daniel Alexander from 8 New Square and James Segan from Blackstone Chambers first responded to the arguments from InterDigital, and then presented Lenovo’s own appeal. A Kirkland & Ellis team around Daniel Lim, Nicola Dagg and Oscar Robinson instructed and supported the barristers.
On Friday parties addressed the opponent’s arguments. There were final opportunities for the judges to ask questions, which they mainly put to Lenovo’s lead counsel Daniel Alexander and James Segan. But trial observers did not see this as a disadvantage.
Questions over calculation
In essence, the two opponents wrestled before the Court of Appeal over James Mellor’s calculation of the licence rate. In March 2023 Mellor found a per unit rate of $0.175 much closer to Lenovo’s proposal of $0.16, and a “long way” from InterDigital’s contention of a blended rate of $0.53. Additionally, the court found the payable lump sum “substantially lower” than InterDigital’s offer of $337 million. Furthermore, the judges found Lenovo the winner regarding comparables, and Lenovo successful on the “top down” and “conduct” aspects of the case.
Lenovo based its appeal on two key points. James Mellor had miscalculated the royalties for the past, claimed Lenovo’s barristers, because he applied to the FRAND rate all sales made by Lenovo from 2007 onwards. Instead, they argued, Mellor should only have calculated sales since the third quarter of 2023.
Lenovo is also challenging James Mellor’s decision to grant interest to InterDigital, at 4% compounded quarterly, for the whole period for which royalties were awarded. Lenovo considers this to be wholly unjustifiable.
As a result, Lenovo’s representatives asked the Court of Appeal judges to set the FRAND lump sum at $108,900,000. The High Court, on the other hand, had set $138.7 million plus $46.2 million in interest.
The calculation of the licence rate also played a central role for InterDigital, as judge Mellor had set a rate significantly lower than InterDigital’s offer. In addition, InterDigital wants a revision of its designation as an unwilling licensor in the first instance ruling. This assessment is important for future negotiations with licensees.
Shift towards implementers?
Judge Mellor’s FRAND judgment has led patent experts to infer the UK High Court would tend towards an implementer-friendly position in the future and thus potentially deter SEP owners from suing there.
During the appeal hearing, the three judges endeavoured to remain neutral. They gave no insight into their current view of the case. Those present considered the hearing to be undecided. In the end, no one wanted to speculate whether the implementer or the SEP holder was winning.
Nevertheless, it was clear that the judges are taking a very close look at judge Mellor’s method of calculating the FRAND rate. Should they set a lower FRAND rate than judge Mellor’s, as Lenovo has called for, it will cause a sensation.
Lenovo initiates second trial
The intensity of the debate in the courtroom showed the importance of the case for London as a patent location. The case will shed light on how the UK patent courts will determine FRAND rates in the future, and especially how judges factor in payments for the past.
But the current InterDigital vs. Lenovo appeal is not the only significant case in determining the future importance of London courts for SEP litigation.
For example, Lenovo has initiated a second FRAND trial in its battle with InterDigital. Lenovo has asked the UK High Court to set a global licence rate for InterDigital’s entire portfolio, which includes implementation patents as well as SEPs. The court is thus to calculate the FRAND rate from 2024 onwards.
More FRAND judgments to come
Furthermore, new cases have already been filed. Another significant case is the appeal in Optis vs. Apple. And in Panasonic’s global dispute against Xiaomi and Oppo, for example, the UK High Court ordered an initial FRAND trial for both implementers in the fourth quarter of 2024 (case ID: HP-2023-000025). Two technical trials will only start two and four months after the FRAND trial. Thus, the court is following previous reasoning from London, in that courts should first clarify the FRAND rate before entering into the often lengthy technical trials. In a further twist, the Unified Patent Court is expected to hear cases in the same dispute around the same time. This means Xiaomi and Oppo may face their first injunctions on the continent while London is hearing the FRAND case.
In a dispute with Ericsson, Lenovo and its subsidiary Motorola are seeking a global cross-licence from the London courts. Ericsson initiated the dispute with patent infringement and ITC cases in the US. In response Lenovo filed suits at the UPC and UK High Court. A global FRAND cross-licence determination by the UK High Court could lead to global patent peace between the two opponents. According to reports, the court has asked the two companies to agree on an interim regime and to stop enforcing injunctions until a competent court decides on a FRAND rate.
July or October?
Following the conclusion of the appeal hearing, InterDigital and Lenovo will now have to be patient. “We reserve our judgments,” said judge Arnold on the final day. “I’m not going to make any promises as to how quickly they will be handed down. We will do it as seriously as we can.”
The judges could publish the verdict as early as the end of July. Indeed, Richard Arnold is generally known to write his judgments quickly. The crucial question, however, is whether the three judges agree in their rulings or whether they have differing opinions on individual points. If this is the case, it will not only be more time-consuming to reach a verdict, but also to interpret it.
The official judicial year in the UK ends at the end of July. The courts then enter a two-month break and do not resume their work until October. Given the complexity of the case, a verdict in around six weeks seems rather unrealistic. But perhaps Richard Arnold, Colin Birss and Christopher Nugee still have surprises in store for the patent community.
https://www.juve-patent.com/legal-commentary/uk-court-frand-ruling-lenovo-interdigital-signals-londons-role-in-sep-litigation/
I've listened to 9 hours of it. Haven't found time to finish...Father's Day and all. Do you have any thoughts about the appeal?
I have to wonder if the Samsung arbitration ruling will have access to any information from the Lenovo appeal. Just a thought.
I watched the first five hours. I'll try to get back to it later today.
Beamr Provides Oracle Cloud Infrastructure Customers with Ultra-Efficient, AI-ready Video Processing Solution
June 11 2024 - 6:00PM
Beamr Imaging Ltd. (NASDAQ: BMR), a leader in video optimization technology and solutions, and a member of Oracle PartnerNetwork (OPN), today announced that its Beamr Cloud solution has achieved Powered by Expertise and is now available in the Oracle Cloud Marketplace. Enabled by NVIDIA accelerated computing, Beamr Cloud offers added value to Oracle Cloud Infrastructure (OCI) customers by delivering efficient, AI-ready video processing.
Beamr Cloud provides customers access to high-quality, fast, and scalable video optimization and transformation, thanks to Beamr’s patented and award-winning Content-Adaptive-Bitrate solution (CABR), enabled by NVIDIA accelerated computing. OCI combined with NVIDIA L40S GPUs delivers powerful AI compute with advanced graphics and media acceleration.
The L40S GPU features third-generation NVIDIA RTX accelerated ray-tracing technology, along with three encode and three decode engines. With the addition of AOMedia Video 1 (AV1) encoding, the L40S delivers 30% more efficient video encoding (vs. the same hardware and software encoding H.264 format) for breakthrough performance and optimized total cost of ownership.
Customers will have the ability to transform videos into the emerging AV1 video format. While video usage is growing at an exponential pace, most videos today are still based on a 20-year-old format (AVC / H.264). The fast and automated transformation to AV1 is poised to enable modernization of large-scale video libraries in markets like AI, broadcasting, streaming, and user-generated content.
Oracle Cloud Marketplace is a one-stop shop for Oracle customers seeking trusted business applications and services offering unique solutions, including those that extend Oracle Fusion Cloud Applications.
“In the AI era, with the rapid growth in video usage and the necessity to analyze video data for insights extraction, data labeling, or monetization, Beamr offers a dual-efficiency solution with both high-quality and high-speed video compression and analysis, powered by Oracle Cloud and NVIDIA GPUs,” said Sharon Carmel, CEO, Beamr. “Beamr’s participation in Oracle PartnerNetwork and our achievement of Powered by Oracle Cloud Expertise further extends our commitment to the Oracle community, and enables customers to easily reap the benefits of Beamr Cloud. We look forward to leveraging the power of the Oracle Cloud to help us achieve our business goals.”
"The cloud represents a huge opportunity for our partner community," said David Hicks, group vice president, Worldwide ISV Cloud Business Development, Oracle. "Beamr’s commitment to innovation with the Oracle Cloud and quality execution helps our mutual customers receive cloud-enabled, automated, and scalable video processing solutions ready to meet critical business needs."
“High-quality video optimization and coding require accelerated computing to maintain user efficiency and productivity,” said Bob Pette, Vice President of Enterprise Platforms, NVIDIA. “By using NVIDIA accelerated computing, Beamr enables customers to process videos significantly faster and meet AI companies’ demands for unmatched video compression.”
Powered by Oracle Cloud Expertise recognizes OPN members with solutions that run on Oracle Cloud. For partners earning the Powered by Oracle Cloud Expertise, this achievement offers customers confidence that the partner's application is supported by the Oracle Cloud Infrastructure SLA, enabling full access and control over their cloud infrastructure services as well as consistent performance.
About Beamr
Beamr (Nasdaq: BMR) is a world leader in content adaptive video solutions. Backed by 53 granted patents, and winner of the 2021 Technology and Engineering Emmy® award and the 2021 Seagate Lyve Innovator of the Year award, Beamr's perceptual optimization technology enables up to a 50% reduction in bitrate with guaranteed quality. www.beamr.com
About Oracle PartnerNetwork
Oracle PartnerNetwork (OPN) is Oracle’s partner program designed to enable partners to accelerate the transition to cloud and drive superior customer business outcomes. The OPN program allows partners to engage with Oracle through track(s) aligned to how they go to market: Cloud Build for partners that provide products or services built on or integrated with Oracle Cloud; Cloud Sell for partners that resell Oracle Cloud technology; Cloud Service for partners that implement, deploy and manage Oracle Cloud Services; Oracle Industry Healthcare for partners that provide commercially available products and/or services built with Oracle Cloud and Oracle Health technologies; and License & Hardware for partners that build, service or sell Oracle software licenses or hardware products. Customers can expedite their business objectives with OPN partners who have achieved Expertise in a product family or cloud service. To learn more visit: http://www.oracle.com/partnernetwork
Trademarks
Oracle, Java, MySQL and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.
Forward-Looking Statements
This press release contains “forward-looking statements” that are subject to substantial risks and uncertainties. Forward-looking statements in this communication may include, among other things, statements about Beamr’s strategic and business plans, technology, relationships, objectives and expectations for its business, the impact of trends on and interest in its business, intellectual property or product and its future results, operations and financial performance and condition. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” “will” “would,” or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the Company’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company’s reports filed from time to time with the Securities and Exchange Commission (“SEC”), including, but not limited to, the risks detailed in the Company’s annual report filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 4, 2024 and in subsequent filings with the SEC. Forward-looking statements contained in this announcement are made as of the date hereof and the Company undertakes no duty to update such information except as required under applicable law.
Investor Contact:
investorrelations@beamr.com
I have the link working now. Take this link:
____________________
https://www.youtube
.com/live/IgzsLXKw5lM?si=-NRTWW9xgknCbfLn
________________________________
* Put those together into one link
* Past that link directly into YouTube search bar
* It is playing just fine
* I believe this link is for yesterday's proceeding
* I don't have time right now to watch it {it's over two and a half hours long}
Re: YouTube link for UK Appeal: The link began to work, then I stopped it to get the link for posting. When I came back to watch it, It also gave me the unplayable message. Sorry.
YouTube link for Appeal:
The appeal is scheduled for the entire week. So it may take a few days of presentation and response for a certain party to feel a little weak in the knees. JMHO
InterDigital Declares Regular Quarterly Cash Dividend
Source: GlobeNewswire Inc.
InterDigital, Inc. (Nasdaq: IDCC), a mobile, video and AI technology research and development company, today announced that its Board of Directors has declared a regular quarterly cash dividend of $0.40 per share on its common stock, payable on July 24, 2024, to shareholders of record at the close of business on July 10, 2024.
About InterDigital®
InterDigital is a global research and development company focused primarily on wireless, video, artificial intelligence (“AI”), and related technologies. We design and develop foundational technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services. We license our innovations worldwide to companies providing such products and services, including makers of wireless communications devices, consumer electronics, IoT devices, cars and other motor vehicles, and providers of cloud-based services such as video streaming. As a leader in wireless technology, our engineers have designed and developed a wide range of innovations that are used in wireless products and networks, from the earliest digital cellular systems to 5G and today’s most advanced Wi-Fi technologies. We are also a leader in video processing and video encoding/decoding technology, with a significant AI research effort that intersects with both wireless and video technologies. Founded in 1972, InterDigital is listed on Nasdaq.
InterDigital is a registered trademark of InterDigital, Inc.
For more information, visit: www.interdigital.com.
InterDigital Contact:
investor.relations@interdigital.com
+1 (302) 300-1857
Paullee- Thank you! EOM
William Blair 44th Annual Growth Stock
Conference
June 4, 2024
Rich Brezski, CFO
https://s25.q4cdn.com/626766191/files/doc_presentations/2024/Jun/04/interdigital-presentation-william-blair-june-4-2024.pdf
Lightwave Logic Reaffirms Commercialization Timeline Presented at the 2024 Annual Shareholder Meeting
Source: PR Newswire (US)
Management Reaffirms Commercialization Pathway with Licensing Perkinamine® Electro-optic
Polymers and Product Sales of High-Speed Modulators
ENGLEWOOD, Colo., June 3, 2024 /PRNewswire/ -- Lightwave Logic, Inc. (NASDAQ: LWLG), a technology platform company leveraging its proprietary electro-optic (EO) polymers to enable next generation high speed data transmission at low power consumption and small foot-print, today, announced the reaffirmation of commercial timelines as noted at the Company's Annual Shareholder Meeting (ASM) on May 22, 2024.
?
As artificial intelligence, machine learning, and other cloud-based services continue to drive the need for higher speed data transmission, the interest in the inherent wide bandwidth, low power consumption and footprint of Lightwave Logic proprietary Perkinamine® electro-optic (EO) polymers is growing. As a result, the company continues to diligently pursue commercial material supply licensing agreements in 2024 and expects the cadence to grow in 2025 and beyond. The company focus today is on Tier 1 companies who have shown keen interest in our Perkinamine® materials. The company demonstration of world class high speed and low power performance earlier this year has accelerated the industry interest in Lightwave Logic's solution which has grown to over 25 companies to date. An updated presentation from the Annual Shareholder Meeting is available at the company's website (click here).
Dr. Michael Lebby, Chairman and Chief Executive Officer of Lightwave Logic, said: "We remain confident in the inherent competitive advantage of our solution and in our commercialization prospects and pipeline for 2024, and we continue to focus on Tier 1 material supply licensing agreements as well as having our polymer high-speed modulators evaluated by fiber optic communication companies. Our team continues to work tirelessly to realize near-term commercial agreement goals for 2024, 2025, and beyond as part of our ultimate goal to create sustainable, long-term value for our fellow shareholders."
About Lightwave Logic, Inc.
Lightwave Logic, Inc. (NASDAQ: LWLG) develops a platform leveraging its proprietary engineered electro-optic (EO) polymers to transmit data at higher speeds with less power in a small form factor. The company's high-activity and high-stability organic polymers allow Lightwave Logic to create next-generation photonic EO devices, which convert data from electrical signals into optical signals, for applications in data communications and telecommunications markets. For more information, please visit the company's website at www.lightwavelogic.com.
Safe Harbor Statement
The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words "may," "will," "should," "plans," "explores," "expects," "anticipates," "continue," "estimate," "project," "intend," and similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, but are not limited to, lack of available funding; general economic and business conditions; competition from third parties; intellectual property rights of third parties; regulatory constraints; changes in technology and methods of marketing; delays in completing various engineering and manufacturing programs; changes in customer order patterns; changes in product mix; success in technological advances and delivering technological innovations; shortages in components; production delays due to performance quality issues with outsourced components; those events and factors described by us in Item 1.A "Risk Factors" in our most recent Form 10-K and 10-Q; other risks to which our company is subject; other factors beyond the company's control.
Investor Relations Contact:
Lucas A. Zimmerman
Managing Director
MZ Group - MZ North America
949-259-4987
LWLG@mzgroup.us
www.mzgroup.us
? View original content to download multimedia:https://www.prnewswire.com/news-releases/lightwave-logic-reaffirms-commercialization-timeline-presented-at-the-2024-annual-shareholder-meeting-302161562.html
SOURCE Lightwave Logic, Inc.
?
Copyright 2024 PR Newswire
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
CASE NO. 5:23-CV-00493-FL
INTERDIGITAL INC., INTERDIGITAL
VC HOLDINGS, INC., INTERDIGITAL
PATENT HOLDINGS, INC., and
INTERDIGITAL MADISON PATENT
HOLDINGS SAS,
Plaintiffs,
v.
LENOVO (UNITED STATES) INC.,
LENOVO PC HK LTD., and MOTOROLA
MOBILITY LLC,
Defendants.
INTERDIGITAL’S OPPOSITION TO
LENOVO’S MOTION TO COMPEL
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 1 of 14
1
I. INTRODUCTION
InterDigital is a research and design company that for more than half a century has been at
the forefront of developing foundational wireless communication and digital video technologies.
D.I. 64 at 7. InterDigital’s inventions help power wireless data transfers and make modern video
streaming possible for billions of people across the globe. Id. at 8.
This lawsuit involves InterDigital’s pioneering inventions in the wireless communications
and video streaming space. Given the importance of these inventions in modern life, InterDigital
licenses its patents covering these inventions to major technology companies including Apple, LG,
Panasonic, Samsung, and many others. Unlike its peers, Defendant Lenovo has repeatedly refused
to take a license to InterDigital’s patents without first forcing InterDigital to pursue expensive
litigation in Germany, the UK, the ITC, and in this Court—all with the hopes of holding out to
secure a better licensing deal for InterDigital’s patented technology.
In keeping with its tactics, Lenovo’s motion to compel is an unnecessary ploy designed to
drive up InterDigital’s litigation costs. InterDigital has dedicated significant time and expense
responding to Lenovo’s 151 discovery requests, diligently providing Lenovo with proportional,
relevant discovery in compliance with the Federal Rules. The additional documents Lenovo seeks
in its motion fall into three categories: (i) documents that are wholly irrelevant to any issue in this
case; (ii) documents that InterDigital has already agreed to provide; and (iii) documents that, while
theoretically containing some minimal relevance, would be so burdensome to locate and produce
and would provide such trivial value to Lenovo, that they are not proportional to the needs of the
case.
For example, Lenovo seeks, among other things “All Documents and Communications
Relating to” “the negotiations” of InterDigital’s third-party license agreements, all of InterDigital’s
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 2 of 14
2
discussions with its licensees “Concerning the Asserted Patents,” “analysis of the proposals” to
InterDigital’s licensees, and “any meetings negotiations, discussions, agreements or other
Communications” regarding the asserted patents or related patents. D.I. 108-5 at RFP 89–91.
Lenovo claims that these (and numerous other) requests “bear on InterDigital’s valuation of the
Asserted Patents” and are relevant to its North Carolina Abusive Patent Assertions Act
(“NCAPAA”) counterclaim—specifically to whether InterDigital has offered to “license the patent
for an amount that is not based on a reasonable estimate of the value of the license,” or whether
InterDigital has offered “to license the patent for an amount that is based on the cost of defending
a potential or actual lawsuit.” D.I. 107 at 2–3 (quoting NCAPAA Factor 5 at §75-143(a)(5)).
But Lenovo does not allege any facts in its counterclaim suggesting that InterDigital
offered to license the asserted patents to it for a low-ball or litigation-cost figure. Nor could it. The
parties never discussed monetary terms for the asserted patents. And while NCAPAA Bad-Faith
Factor 5 is clearly not relevant here, in order to avoid burdening the Court with a dispute,
InterDigital has either produced, or agreed to produce, both its claim charts and its executed license
agreements with each of InterDigital’s licensees of the asserted patents. These multi-million-dollar
license agreements clearly show that InterDigital is not suing third parties merely to extract quick
settlement payments. NCAPAA Factor 5 certainly does not permit Lenovo unbounded,
disproportionate discovery into nearly every communication between InterDigital and its thirdparty licensees as Lenovo seeks through its motion. See Howard v. Coll. of the Albemarle, No.
2:15-CV-00039-D, 2016 U.S. Dist. LEXIS 109242, at *11 (E.D.N.C. Aug. 16, 2016) (citation
omitted) (“Litigants may not use the discovery process as a ‘fishing expedition.’”).
Lenovo’s additional justifications based on the NCAPAA Factors are likewise unsupported.
InterDigital never “failed to conduct an analysis comparing the claims in the patent to” Lenovo’s
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 3 of 14
3
products (D.I. 107, quoting NCAPAA Factor 2). Lenovo admits InterDigital sent it a claim chart,
which compares the claims and Lenovo’s products. D.I. 107 at 5. Thus, NCAPAA Factor 2 is
irrelevant here.
Next, InterDigital has already agreed to provide the claim charts of infringement
InterDigital sent to third-party licensees. Thus, Lenovo’s arguments regarding Factor 9 (whether
InterDigital sent the same demand letter to multiple recipients) are moot.
Finally, Lenovo seeks “[d]ocuments sufficient to show Plaintiff’s contracts and agreements
with Third Parties for production of Products embodying the invention claimed in any claim of
any Asserted Patent.” D.I. 107 at 5. But, once again, InterDigital has already produced or agreed
to produce each of its agreements with third parties that allow the third parties to manufacture their
products that practice the asserted patents (e.g., the license agreements). Thus, this request is moot
as well. For these reasons and the additional reasons detailed herein, InterDigital respectfully
requests that the Court deny Lenovo’s motion.
II. FACTUAL BACKGROUND
A. Lenovo’s Expansive Discovery Requests and InterDigital’s Production.
On December 15, 2023, Lenovo served its first sets of discovery requests: 114 Requests
for Production and 12 Interrogatories. See D.I. 108-2, 108-5. On January 16, 2024, InterDigital
provided its Objections and Responses to those requests including the requests at issue here: RFP
Nos. 20, 21, 58, 62, 86, 89, 90, 91, 95, 96, and 97 and Interrogatory No. 4, summarized below:
? RFP 20 – documents relating to internal InterDigital meetings;
? RFP 21 – valuation of the asserted patents;
? RFP 58 – evaluation of whether the accused products infringe the asserted patents;
? RFP 62 – correspondence concerning accusations of infringement of the asserted patents;
? RFP 86 – documents concerning attempts to license the asserted patents;
? RFP 89 – documents regarding the economic terms of agreements for the asserted patents;
? RFP 90 – documents relating to discussions with licensees concerning the asserted patents;
? RFP 91 – documents relating to communications regarding the asserted patents;
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 4 of 14
4
? RFP 95 – documents identifying all people involved in licensing of InterDigital’s IP;
? RFP 96 – documents showing InterDigital’s agreements with third parties for production
of products embodying the inventions of the asserted patents;
? RFP 97 – documents regarding the licensing of any of the Asserted Patents, regardless of
whether a license or any agreement was actually executed; and
? ROG 4 – efforts to license the asserted patents.
D.I. 108-8, 108-9.
Nearly four months passed, and InterDigital heard nothing from Lenovo on these requests.
Then, on April 5, 2024, Lenovo sent a letter requesting that InterDigital supplement its response
to Interrogatory 4 (and another Interrogatory not at issue here) and produce additional documents
in response to the above RFPs within two weeks. D.I. 108-1. Lenovo’s sole basis for the purported
relevance of these requests was a vague reference to its NCAPAA counterclaim. Id. In its response
to Lenovo’s April 5th letter, InterDigital explained that it was in the process of supplementing its
response to Interrogatory 4 and disagreed that the RFPs identified by Lenovo have any relevance
to its NCAPAA counterclaim, but nevertheless, agreed to produce additional documents—many
of which InterDigital had already provided to Lenovo in a parallel ITC proceeding. D.I. 108-7 at
1, 108-6 at 1-2. InterDigital produced the majority of those documents on April 30, 2024. The
parties met and conferred about the issues in the parties’ letters on May 1st. D.I. 108-6 at 1-2.
On May 8, 2024, InterDigital produced additional documents responsive to the RFPs at
issue here and identified documents—by Bates numbers—that are responsive to Lenovo’s RFPs.
InterDigital again explained in detail why the additional documents Lenovo demands are not
relevant to Lenovo’s NCAPAA counterclaim and why their production would be disproportionate
to the needs of this case. D.I. 108-6. That same day, Lenovo served a second set of discovery
requests: RFPs 115–130 and Interrogatory Nos. 13–16.
On May 16, 2024, InterDigital supplemented three Interrogatory responses related to
Lenovo’s NCAPAA counterclaim: Rog No. 4 (efforts to license the asserted patents); Rog No. 7
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 5 of 14
5
(InterDigital’s bases for an injunction) and Rog No. 12 (InterDigital’s bases for its contention that
the NCAPAA does not apply it to it and InterDigital did not bring this litigation in “bad faith”).
D.I. 108-9. In these responses, InterDigital included Bates numbers identifying which documents
it produced related to which Lenovo interrogatory. Less than 24 hours later, without requesting to
meet and confer to attempt to resolve any lingering disputes, Lenovo filed its motion to compel.
B. The NCAPAA Factors.
Lenovo’s purported basis for the relevance of the requests at issue here are four factors
related to its NCAPAA counterclaim: Bad-Faith Factors 2, 5, and 9 and Good-Faith Factor 4.
(a) A court may consider the following factors as evidence that a person has made
a bad-faith assertion of patent infringement:
. . .
(2) Prior to sending the demand, the person failed to conduct an analysis
comparing the claims in the patent to the target’s products, services, and
technology, or the analysis was done but does not identify specific areas in
which the products, services, and technology are covered by the claims in
the patent.
. . .
(5) The person offers to license the patent for an amount that is not based
on a reasonable estimate of the value of the license, or the person offers to
license the patent for an amount that is based on the cost of defending a
potential or actual lawsuit.
. . .
(9) The person making the claim or assertion sent the same demand or
substantially the same demand to multiple recipients and made assertions
against a wide variety of products and systems without reflecting those
differences in a reasonable manner in the demands.
(b) A court may consider the following factors as evidence that a person has not
made a bad-faith assertion of patent infringement:
. . .
(4) The person makes a substantial investment in the use of the patent or in
the production or sale of a product or item that the person reasonably
believes is covered by the patent. “Use of the patent” in the preceding
sentence means actual practice of the patent and does not include licensing
without actual practice.
N.C. Gen. Stat. Ann. § 75-143.
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 6 of 14
6
III. ARGUMENT
Lenovo’s sole relevance argument for the expansive discovery it now seeks is a vague
relationship to its NCAPAA counterclaim. But, Lenovo’s requests seek information far beyond the
narrow scope of the NCAPAA factors, and any potential relevance they may have is far outweighed
by the burden to InterDigital. Moreover, InterDigital has already provided responsive
documents—including documents that demonstrate the value of the asserted patents.
A. NCAPAA Bad-Faith Factor Five Does Not Justify Lenovo’s Expansive
Discovery Requests.
NCAPAA Bad-Faith Factor 5 provides the sole basis for the purported relevance of the
majority of the requests at issue, which collectively seek every document related to any negotiation
between InterDigital and any company it had licensing discussions with concerning the asserted
patents. Lenovo does not separately consider how each of its requests is relevant to Factor 5,
instead alleging that they all relate to the asserted patents’ “valuation.” See D.I. 107 at 4.
Bad-Faith Factor 5 relates to low-ball or litigation-cost patent licensing demands, which
may be indicative of bad-faith assertions of patent infringement. See N.C. Gen. Stat. § 75-143(a)(5)
(requiring an offer from InterDigital to Lenovo “to license the patent[s] for an amount that is not
based on a reasonable estimate of the value of the license,” or that is based “on the cost of
defending a potential or actual lawsuit.”). It simply does not apply here.
InterDigital has never provided a demand to Lenovo to license the asserted patents for a
specific dollar figure—the parties’ licensing discussions never reached that point as Lenovo
ignored all of InterDigital’s requests to discuss the asserted patents. Put another way, Bad-Faith
Factor 5 cannot apply because InterDigital never made a low-ball or litigation-cost demand. Thus,
NCAPAA Factor 5 is not a basis for Lenovo to seek any documents, let alone every communication
that may in some way relate to licensing.
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 7 of 14
7
Moreover, InterDigital has already produced (or is in the process of producing) every
executed license agreement for the asserted patents and all claim charts (technical comparisons
between the asserted patents and the accused products) it sent to its licensees. Thus, to the extent
that licensing documents have any relevance to Bad-Faith Factor 5, InterDigital has already
produced hundreds of documents and is in the process of producing more. To the extent Lenovo’s
motion seeks more, it should be denied.1 See Mohammed v. Daniels, No. 5:13-CT-3077-FL, 2015
U.S. Dist. LEXIS 106089, at *5 (E.D.N.C. Aug. 12, 2015) (Flanagan, J) (“Due to the vague nature
of plaintiff’s discovery requests and in light of the large volume of materials defendants already
provided plaintiff, plaintiff’s current discovery requests appear to be a fishing expedition.”).
Lenovo does not dispute InterDigital’s production of these documents. D.I. 107 at 7
(acknowledging that InterDigital has “already collected and produced” requested information in
the parallel ITC case and has “reproduced a subset” of that information in this case).
Even if Lenovo’s discovery requests were marginally relevant to Bad-Faith Factor 5, any
such relevance is not “proportional to the needs of the case, considering the importance of the
issues at stake in the action, the amount in controversy, the parties’ relative access to relevant
information, the parties’ resources, the importance of the discovery in resolving the issues, and
whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R.
Civ. P. 26(b)(1). Lenovo’s requests encompass enormous volumes of highly sensitive
communications regarding InterDigital’s licensing—many of which are privileged or are subject
to third-party non-disclosure agreements. For example, RFP No. 86 seeks documents and
communications concerning any attempt to license the Asserted Patents, RFP No. 90 seeks
1
To accomplish this production, InterDigital is actively seeking approval from third parties (e.g.,
Apple), as required by its licenses, to produce documents in this litigation.
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 8 of 14
8
documents and communications relating to negotiations with licensees, and RFP No. 97 seeks
documents and communications relating to efforts to license the Asserted Patents, regardless of
whether any license was executed. Lenovo’s requests are not proportional under Fed. R. Civ. P.
26(b)(1) as any theoretical relevance of these third-party communications is clearly outweighed
by the prejudice InterDigital faces in collecting a huge number of sensitive documents, almost all
of which require third-party approval. See Va. Dep’t of Corr. v. Jordan, 921 F.3d 180, 188-89 (4th
Cir. 2019) (“Proportionality requires courts to consider, among other things, whether the burden
or expense of the proposed discovery outweighs its likely benefit. This relieves parties from the
burden of taking unreasonable steps to ferret out every relevant document.”); Cruz v. Bd. of
Supervisors, No. 91-1547, 1993 U.S. App. LEXIS 187, at *7 (4th Cir. Jan. 7, 1993) (“In this case,
[plaintiff] requested a vast amount of highly sensitive material with little or no notion of what he
might find, in what can properly be termed a ‘fishing expedition.’”).
B. InterDigital Already Produced Documents Responsive to RFP No. 58.
Lenovo argues that its RFP No. 58—seeking “Documents sufficient to show
[InterDigital]’s analysis, consideration, testing, or evaluation of whether any Accused Product
Infringes any claim of the Asserted Patents . . . .”—is relevant to Bad-Faith Factor 2 of its NCAPAA
counterclaim. D.I. 107 at 4. Bad-Faith Factor 2 of the NCAPAA applies if InterDigital “failed to
conduct an analysis comparing the claims in the patent to [Lenovo’s] products, services, and
technology, or the analysis was done but does not identify specific areas in which the products,
services, and technology are covered by the claims in the patent.”
As Lenovo acknowledges, InterDigital has already produced claim charts that compare the
asserted patent claims to the accused Lenovo devices. D.I. No. 107 at 4–5. These charts were
created prior to this lawsuit, clearly demonstrate Lenovo’s infringement, and are directly
responsive to Lenovo’s Request No. 58. Further, InterDigital has produced additional claim charts
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 9 of 14
9
previously sent to Lenovo detailing its infringement of the Asserted Patents. D.I. 108-9 at 55–56.
These documents provide, on a claim limitation-by-limitation basis, InterDigital’s contentions
regarding Lenovo’s infringement of the Asserted Patents. Accordingly, once again, Lenovo has the
documents responsive to its Request.
Yet, Lenovo asserts that “InterDigital should be compelled to produce documents for all
other investigations it performed into the practice of the products when evaluating whether to
assert its claims.” D.I. No. 107 at 5. It is unclear as to what is meant by “other investigations.”
Regardless, InterDigital again confirms it has produced the documents it has in its possession
responsive to this request.
C. NCAPAA Bad-Faith Factor 9 Is Inapplicable Here, but Regardless,
InterDigital Has Already Produced Documents Responsive to RFP 62.
Lenovo asserts that InterDigital should be forced to produce additional documents
responsive to RFP No. 62, which, in broad terms, seeks documents regarding “any
Communication, including demand letters” informing Lenovo or third parties that they infringe
the asserted patents. D.I. 108-5 at 25. Specifically, Lenovo asserts that it “seeks. . . other demands
InterDigital has made that are relevant to . . . factor [9].” D.I. 107 at 5. InterDigital never sent a
“demand” to Lenovo. But Bad-Faith Factor 9 only applies if InterDigital “sent the same demand”
to Lenovo as it did to “multiple recipients.” See N.C. Gen. Stat. § 75-143(a)(9). Because
InterDigital never sent Lenovo a demand at all, Bad-Faith Factor 9 is inapplicable here.
Regardless, InterDigital has provided (or shortly will produce) all executed licenses and
claim charts created during the process that led to the licenses, which disclose InterDigital’s
contentions. Accordingly, to the extent that factor nine has any marginal relevance, Lenovo already
has or shortly will have responsive documents. To the extent that Lenovo seeks additional
documents, such request is foreclosed by Rule 26’s proportionality requirement.
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 10 of 14
10
D. InterDigital Already Produced Documents Responsive to Request No. 96.
Finally, Lenovo asserts that it needs additional documents responsive to RFP No. 96, which
requests “Documents sufficient to show Plaintiff’s contracts and agreements with Third Parties for
production of Products embodying the invention claimed in any claim of any Asserted Patent.”
D.I. 108-5 at 32. As explained above, InterDigital has or shortly will produce all licenses with third
parties relating to the Asserted Patents. The licenses specifically provide the terms by which
licensed third parties may produce “products embodying the invention claimed in any claim of any
Asserted Patent.” Id. Thus, this request is moot, and the Court should deny this portion of Lenovo’s
motion.
IV. CONCLUSION
InterDigital has clearly produced (or agreed to produce) the vast majority of what Lenovo
seeks. The remainder has either no relevance to this case or such minimal relevance that it is far
outweighed by the tremendous burden of searching for, collecting, and producing sensitive
communications with third parties that, even if produced, would have negligible importance in
resolving the issues related to Lenovo’s misguided NCAPAA counterclaim. InterDigital
respectfully asks this Court to deny Lenovo’s Motion it its entirety.
Respectfully Submitted,
Dated: May 31, 2024 /s/ M. Scott Stevens
M. Scott Stevens
NC State Bar No. 37828
Kirk T. Bradley
NC State Bar No. 26490
ALSTON & BIRD LLP
Vantage South End
1120 South Tryon Street, Suite 300
Charlotte, NC 28203
Telephone: 704-444-1025
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 11 of 14
11
Fax: 704-444-1935
scott.stevens@alston.com
kirk.bradley@alston.com
Philip C. Ducker
CA State Bar No. 262644
Katherine G. Rubschlager
CA State Bar No. 328100
ALSTON & BIRD LLP
560 Mission Street, Suite 2100
San Francisco, CA 94105
Telephone: 415-243-1000
Fax: 415-243-1001
phil.ducker@alston.com
katherine.rubschlager@alston.com
Ryan W. Koppelman
CA State Bar No. 290704
ALSTON & BIRD LLP
333 S. Hope St., 16th Floor
Los Angeles, CA 90071
Telephone: (213) 576-1000
Facsimile: (213) 576-1100
ryan.koppelman@alston.com
Special Appearance Pursuant to L.R. 83.1
Forthcoming
Neal A. Larson
GA State Bar No. 599069
TX State Bar No. 24106190
ALSTON & BIRD LLP
1201 West Peachtree Street
Atlanta, GA 30309
Telephone: (404) 881-7000
Facsimile: (404) 881-7777
neal.larson@alston.com
Special Appearance Pursuant to L.R. 83.1
Forthcoming
Jenny J. Wang
NC State Bar No. 61255
ALSTON & BIRD LLP
555 Fayetteville Street, Suite 600
Raleigh, NC 27601
Case 5:23-cv-00493-FL Document 116 Filed 05/31/24 Page 12 of 14
12
Telephone: (919) 862-2200
Facsimile: (919) 862-2260
jenny.wang@alston.com
Christopher L. McArdle
NY State Bar No. 4823654
Ravi Shah
NY State Bar No. 5720149
ALSTON & BIRD LLP
90 Park Ave., 15th Floor
New York, NY 10016
Telephone: 212-210-9400
Fax: 212-210-9444
Chris.McArdle@alston.com
Ravi.Shah@alston.com
Attorneys for Plaintiffs
InterDigital, Inc. InterDigital VC Holdings,
Inc., InterDigital Patent Holdings, Inc., and
InterDigital Madison Patent Holdings SAS
Implied Volatility Surging for InterDigital (IDCC) Stock Options
May 30, 2024 — 10:17 am EDT
Written by Zacks Equity Research
Investors in InterDigital, Inc. IDCC need to pay close attention to the stock based on moves in the options market lately. That is because the Jun 21, 2024 $120.00 Put had some of the highest implied volatility of all equity options today.
What is Implied Volatility?
Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.
What do the Analysts Think?
Clearly, options traders are pricing in a big move for InterDigital shares, but what is the fundamental picture for the company? Currently, InterDigital is a Zacks Rank #3 (Hold) in the Wireless Equipment industry that ranks in the Bottom 21% of our Zacks Industry Rank. Over the last 60 days, no analysts have increased their earnings estimates for the current quarter, while three analysts have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from $1.15 per share to 86 cents in that period.
Given the way analysts feel about InterDigital right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.
https://www.nasdaq.com/articles/implied-volatility-surging-interdigital-idcc-stock-options
InterDigital to Present at Upcoming Conferences
Source: GlobeNewswire Inc.
InterDigital, Inc. (Nasdaq: IDCC), a mobile, video and AI technology research and development company, today announced that the company will be presenting at two upcoming investor events: the William Blair 44th Annual Growth Stock Conference on Tuesday, June 4, 2024, at 4:20 PM ET, and the 14th Annual East Coast IDEAS Investor Conference on Wednesday, June 12, at 4:10 PM ET.
Both events will be webcast live and an archived replay of the presentation will also be available following the conference. For more information, please visit the Investors section of the company’s website.
About InterDigital®
InterDigital is a global research and development company focused primarily on wireless, video, artificial intelligence (“AI”), and related technologies. We design and develop foundational technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services. We license our innovations worldwide to companies providing such products and services, including makers of wireless communications devices, consumer electronics, IoT devices, cars and other motor vehicles, and providers of cloud-based services such as video streaming. As a leader in wireless technology, our engineers have designed and developed a wide range of innovations that are used in wireless products and networks, from the earliest digital cellular systems to 5G and today’s most advanced Wi-Fi technologies. We are also a leader in video processing and video encoding/decoding technology, with a significant AI research effort that intersects with both wireless and video technologies. Founded in 1972, InterDigital is listed on Nasdaq.
InterDigital is a registered trademark of InterDigital, Inc.
For more information, visit: www.interdigital.com.
InterDigital Contact:
investor.relations@interdigital.com
+1 (302) 300-1857
On Fri, May 24, 2024, 12:49?PM Investor Relations
Hi Glenn, I’m following up on your email inquiry to our Media Inbox. I’ve checked with our team to ask if we are involved with MPAI, and no, we are not involved at this time.
Best regards,
Raiford
Tesla asks UK court to let 5G patents lawsuit continue to trial
Reuters 05/23/2024 10:28
By Sam Tobin
LONDON, May 23 (Reuters) - Tesla TSLA.O on Thursday asked a London court to allow its lawsuit against U.S. technology firm InterDigital and a patent licensing platform to continue, as the automaker seeks a patent licence ahead of its launch of 5G vehicles in Britain.
Elon Musk's company is suing InterDigital IDCC.O and Avanci – which licenses patents from multiple owners, largely for automotive uses – at London's High Court.
Tesla wants the court to determine the fair, reasonable and -discriminatory (FRAND) terms of a licence for Tesla to use patents owned by patent holders, including InterDigital and which are licensed by Avanci, in its planned 5G vehicles.
InterDigital and Avanci, however, both say the case against them should be thrown out, partly because any litigation should take place in the United States rather than in London.
Thomas Raphael, a lawyer representing InterDigital, told the High Court that what Tesla really wants from the case is a licence on FRAND terms to use the patents.
"That is a licence InterDigital cannot grant and cannot make Avanci grant," he said. Avanci, meanwhile, argues Tesla has contractual rights against it.
But Tesla, whose lawyers said in court filings that the company "plans imminently to launch 5G vehicles in the UK", argues that Avanci is demanding too much for a license and refusing to .
"Avanci makes a basic demand of $32 per 5G-connected vehicle, which is more than double the rate being paid by Tesla and most other vehicle manufacturers for a 4G vehicle," Tesla's lawyer James Segan said in written arguments.
He added that Tesla is entitled to have the High Court determine what FRAND terms would be for a licence to use InterDigital's patents around the world.
London's High Court has previously been willing to grant global FRAND licences, bolstered by a landmark Supreme Court ruling in 2021.
[Link not available]
Sequans Cassiopeia CA410 Module Awarded Industry Certification and Completes Successful Utility Field Testing
https://iotbusinessnews.com/2024/05/20/89100-sequans-cassiopeia-ca410-module-awarded-industry-certification-and-completes-successful-utility-field-testing/
Lightwave Logic Collaborates With Advanced Micro Foundry To Develop Polymer Slot Modulators
Standard Fabrication Processes on 200mm Silicon Wafers Using Lightwave Logic's Proprietary Slot Modulator Design Achieved Record Breaking sub-1V Drive at 200Gbps PAM4 – Ideal for 800Gbps and 1.6T Pluggable Transceivers.
Mr. Rob Stien, Chief Communications and Public Policy Officer
Questions:
* Is InterDigital Communications a member of or participate in the Standards organization titled "Moving picture, Audio and Data Coding by Artificial Intelligence " (MPAI)?
* If IDCC is involved with MPAI, does InterDigital personnel hold any leadership positions such as Chair or Co-Chair?
[email sent 5/18/24]
______________________
Additional information provided by Gemini:
Who are the participants in the standards board titled "Moving picture, Audio and Data Coding by Artificial Intelligence "?
The specific participants of the Moving Picture, Audio and Data Coding by Artificial Intelligence (MPAI) standards board are not publicly disclosed. However, the organization is open to any interested party to join as a member. This means that the board likely includes representatives from various companies and organizations with an interest in AI-based data coding, such as:
* Technology companies that develop AI and machine learning algorithms
* Consumer electronics companies that manufacture devices that use video, audio, and data compression
* Content providers that create and distribute movies, music, and other forms of digital media
* Research institutions that are developing new AI-based compression techniques
dws - I'm showing 318.35k for the entire day, including after hours. Have a great weekend!
IDCC short interest as of 4/30/24 @ 3.58m down from 3.69m.
Interdigital Inc IDCC.O: Jefferies cuts target price to $100 from $106
INTERDIGITAL INC : JEFFERIES CUTS TO HOLD FROM BUY
Reuters 05/13/2024 03:24
LENOVO AND MOTOROLA PHONES, TABLETS AND OTHER DEVICES BANNED IN GERMAN
May 11, 2024
https://www.gizchina.com/author/efosa/
LTE - I posted on Feb 13th about the Tesla/ Advanci issue regarding InterDigital from this same link dated Jan 3rd. I haven't seen anything more recent concerning the issue.
InterDigital, Inc. (IDCC) Q1 2024 Earnings Call Transcript
May 02, 2024 3:03 PM ETInterDigital, Inc. (IDCC) Stock
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Q1: 2024-05-02 Earnings Summary
EPS of - misses by $2.76 | Revenue of - (-100.00% Y/Y) misses by $213.85M
nterDigital, Inc. (NASDAQ:IDCC) Q1 2024 Earnings Conference Call May 2, 2024 10:00 AM ET
Company Participants
Raiford Garrabrant - Head, Investor Relations
Liren Chen - President and Chief Executive Officer
Rich Brezski - Chief Financial Officer
Conference Call Participants
Arjun Bhatia - William Blair
Anja Soderstrom - Sidoti
Scott Searle - ROTH MKM
Operator
Good day and thank you for standing by. Welcome to the InterDigital First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Raiford Garrabrant, Head of Investor Relations. Please go ahead.
Raiford Garrabrant
Good morning to everyone and welcome to InterDigital’s first quarter 2024 earnings conference call. I am Raiford Garrabrant, Head of Investor Relations for InterDigital. With me on today’s call are Liren Chen, our President and CEO; and Rich Brezski, our CFO. Consistent with prior calls, we will offer some highlights about the quarter and the company and then open up the call for questions. For additional details, you can access our earnings release and a slide presentation that accompany this call on our Investor Relations website.
Before we begin our remarks, I need to remind you that in this call, we will make forward-looking statements regarding our current beliefs, plans and expectations, which are not guarantees of future performance and are made only as of the date hereof. Forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from results and events contemplated by such forward-looking statements. These risks and uncertainties include those described in the Risk Factors section of our 2023 annual report on Form 10-K and in our other SEC filings. In addition, today’s presentation may contain references to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the supplemental materials posted to the Investor Relations section of our website.
With that taken care of, I will turn the call over to Liren.
Liren Chen
Thank you, Raiford. Good morning, everyone. Thank you for joining us today. On our last call, we provided annual guidance for 2024 revenue of between $620 million and $670 million. This guidance highlights the increasing momentum of our business and the multiple growth opportunity that we have identified and expect to achieve through the rest of the year. Today, I am pleased to share that we have made significant headwinds in achieving our goal and reconfirm our 2024 annual guidance. Revenue for the first quarter were $264 million, up by 30% year-over-year and above the high-end of our guidance. Our Q1 revenue was one of the highest in our history and an all-time high for our CE and our IT licensing program.
Through the quarter, we have made great progress on multiple fronts of our business. We signed 7 new license agreements. We enhanced our position as a leader in the application of AI in both wireless and video and we received several positive core decisions, which we believe will help us to advance negotiations with certain unlicensed smartphone OEMs. We began the quarter with a new landmark license with Samsung TV business. The agreement covers patents and our joint licensing program with Sony and introduced our own pattern across a range of video and Wi-Fi technologies. Samsung is a market leader in TV and this agreement highlights both the value of video and Wi-Fi innovation and the growth we continue to build in licensing the consumer electronics sector. I would emphasize that this new agreement is separate to the Samsung smartphone license. We announced at the start of 2023 that Samsung and InterDigital has agreed to renew the license for their smart TV to our portfolio.
The final term of the smartphone license includes how much spent on mass payouts are still the subject of arbitration hearing, which is on track to be held this summer with the final resolution expected by end of this year. The 7 new agreements that we signed in the first quarter reflect the momentum we continue to see across all our licensing programs and our strength in consumer electronics and our IT in particular. The revenue and recurring revenue in Q1 from our CE and our IT program were both record highs. With Samsung and other agreements that we closed in the quarter, we have increased the cumulative value of contracts that we have signed over the last 3 years to almost $2.7 billion, giving us an incredible strong base from which to drive new long-term agreements and pursue additional growth opportunities.
Staying on license, we are making significant progress in our effort to ensure that we received further compensation for our innovation from unlicensed smartphone OEMs. Earlier today, a German court issued a very positive decision for us in our dispute with Lenovo. The court ruled that Lenovo infringed one of our 4G and 5G standard essential patents that InterDigital has acted in a friend manner that Lenovo is an on-leading licensee who engaged in hold out and should therefore be enjoined in the German market. The injunction means that Lenovo will be prohibited from selling 4G and 5G contract devices in Germany. Also, as part of our dispute with OPPO, a German court also wrote that OPPO infringed Interdigital’s 4G and 5G standard issuance of patent in sued. The Interdigital has acted in a friend manner that OPPO is an on-leading licensee, the court also awarded injunction against OPPO. In India, in another trial against OPPO, we received yet another positive decision, but OPPO was ordered to pay royalties in the form of a security deposit to the court. The Indian court also heavily criticized and fined OPPO for delaying tactics during our negotiations and ordered as the trial be concluded before end of the year. We are encouraged by this recent development in our cases and we believe we have built significant momentum in our negotiations with both companies. As I have said many times before, we always prefer to sign long-term license through amicable negotiations, but we are ready to enforce our patent rights, if necessary.
Our strength as the fundamental innovator in critical technology, continue to underpin our progress. Our research team has long been recognized by the world leaders in the development of wireless and video technology. And increasingly, our leadership in AI is coming to the forefront. In Q1, one of our senior engineers was appointed to hedge the AI and machine learning standing committee of IEEE, the standard development automation, which leads the evolution of Wi-Fi. At this year’s Mobile World Congress in Barcelona, we showcased two demonstrations, which has AI at their heart. One was in partnership with Keysight, which use a newer network developed by our genres to demonstrate the application of AI in our 6G network. And a second combined advanced video compression and AI to significantly reduce energy consumption of streaming video while preserving picture quality.
Also at MWC, we demonstrated cutting-edge immersive video and haptic technology in a specific use case of eSports and showed our increasing leadership in integrated sensing and communications and emerging technology, which will be a pillar of 6G. Our research success continue to be reflected in the development of our global patent portfolio. Recently, we were confirmed among the top 25 companies globally that filed the most new pattern applications with European patent office last year. Our number of new applications filed with the EPO increased by 40% year-over-year in a clear indication of our success in translating our foundational innovation into patent assets. The strength of innovation and patent footprint give us an excellent platform to drive further growth in our existing licensing program and in green field opportunities such as cloud-based video services. And with our track record for delivering new license agreements with leading manufacturers such as Samsung, we believe we are in an excellent position to reach our financial target for the year.
With that, I’ll hand it over to Rich to talk you through the numbers in more details.
Rich Brezski
Thanks, Liren. Q1 was another outstanding quarter for InterDigital as our strong revenue growth drove both non-GAAP EPS and adjusted EBITDA to the high end of our guidance range. This growth was powered by new licensing agreements, most notably Samsung TV. These results support our long-term objective of delivering consistent revenue growth combined with strong margins. Total revenue increased 30% year-over-year with CE and IoT leading the way. Based on new licensing agreements reached in Q1, recurring revenue for CE and IoT reached an annualized run rate of almost $90 million, an increase of 57% year-over-year and has roughly doubled over the last 2 years. When combined with catch-up revenue of $160 million, CE and IoT total revenue for the quarter reached an all-time high at $183 million. This performance highlights our ability to deliver significant growth beyond the smartphone market.
Our adjusted EBITDA for the quarter of $130 million equates to an adjusted EBITDA margin close to 50%, consistent with our guidance. These results demonstrate the power of our business model. Our investments in fundamental technologies drive top line growth while the reuse of those technologies across multiple verticals delivers high margins and drives cash flow. Our strong performance in Q1 produced cash from operations of $51 million and free cash flow of $41 million. This strong cash flow, combined with a cash balance of nearly $1 billion, supports our continued return of capital to shareholders. In Q1, we repurchased approximately 300,000 shares for $29 million. We repurchased another 200,000 shares in April for a year-to-date total of roughly 0.5 million shares. Since we first paid our dividend in 2011, we have now returned approximately $1.8 billion to shareholders through share buybacks and dividends.
In that time, we reduced our outstanding share count by almost 45% from more than 45 million shares to just over 25 million shares. And with $246 million left on the current buyback authorization, we’re not done yet. Looking forward to Q2, we expect recurring revenue will include $93 million to $97 million of revenue from existing contracts plus any amounts we recognize from any new agreements we may sign over the balance of the quarter. Based only on existing contracts, we expect an adjusted EBITDA margin of about 38% and non-GAAP diluted earnings per share of $0.70 to $0.80. Any additional agreements would be additive to those totals. Our strong first quarter results have us on track to meet our full year 2024 targets, and we are reaffirming our prior guidance of revenue in the range of $620 million to $670 million.
We continue to expect an adjusted EBITDA margin of roughly 50% for the full year of 2024 and non-GAAP diluted earnings per share of $7.45 to $8.76. Before I conclude, I’d like to mention that we’ll be attending four conferences over the remainder of the second quarter, the Bank of America Global Tech Conference in San Francisco on June 4. And the William Blair Growth Stock Conference in Chicago on June 4, the IDEAS Investor Conference in New York on June 12 and the Roth 10th Annual London Conference on June 26 and 27. Please check with your representatives at those firms if you’d like to schedule a meeting.
With that, I’ll turn it back to Raiford.
Raiford Garrabrant
Thanks, Rich. At this point, operator, we are ready to take questions.
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] Our first question comes from Arjun Bhatia of William Blair.
Arjun Bhatia
Alright. Thank you, guys. Appreciate you taking the question. To start, Liren, maybe a couple of questions on the Samsung side. More on the smartphone side, not necessarily on the TV side. But as you think about just going through arbitration here over the summer and looking at a potential outcome later this year, how should we think about maybe the range of outcomes that you’re considering that could result from that arbitration? I mean, is there a possibility that prices are going up and maybe how is your royalty rate is coming up? And how do you handicap that? And then for Rich, the same thing on the Samsung smartphone side, can you just remind us how you’re accounting for the license revenue in the recurring line from Samsung thus far? And might that be something that’s contributing to the decline in smartphone recurring revenue. Thank you.
Liren Chen
Take one or two simple questions. So, on the Samsung smartphone arbitration, as we have discussed in the prior call, since having our customer for the smartphone side for actually a long time since 1995 and before they release the variables, with guidance. The last contract was a 10-year agreement and which covered frankly, the previous generation technology and not including very valuable assets like 5G and a lot of the advanced video technology we have done. So that agreement acts for December 31, 2022, and both parties has agreed through negotiations that they will renew the agreement without disruption and that we frankly couldn’t get a pricing agreed upon in time.
So we both agreed to do a binding arbitration that started January 1, 2023. We are, frankly, well into the process. The panel has been assembled and the hearing has been confirmed this summer and will be decided before the end of the year as the current projection. So regarding valuation for multiple reasons, we feel very confident that the value of portfolio has gone up, that Santa’s benefited more through the years compared to the time of the last agreement. So that obviously, we still need to have the arbitration to go through to confirm our belief.
And I’ll hand it over to Rich to comment on the revenue recognition side.
Rich Brezski
Yes. Thanks, Liren. On the rev rec, we’ve been recognizing since the first quarter of last year at level with the prior Samsung agreement, which is just shy of $80 million a year. That’s what we believe is a conservative estimate. We have effectively a license in place with Samsung, and we are just estimating what the ultimate outcome will be on a conservative basis. But because of the conservative nature of the GAAP requirement, we are certainly hopeful that we will have a positive true-up when it’s ultimately concluded. And as to the question on the decline in recurring revenue, I presume you mean ‘23 going into ‘24. So, based on what I just said, it’s not because of Samsung, but rather expiration of other agreements, most notably Huawei, which expired at the end of last year.
Arjun Bhatia
Yes. Perfect. Alright. Thank you. One more, if I can. It was interesting to hear the injunction against Lenovo and OPPO. And I am curious, in the past, Liren, to the extent you have experienced with these injunctions, how do you think they – or how have they may be changed behavior of some of these manufacturers in the past? I mean is it enough of an incentive to bring them to the negotiation table and say, hey, we want to strike a deal. Like how punitive can those injunctions be for these companies to get them to strike a deal with you?
Liren Chen
Yes. Hey Arjun. As we announced in a separate press this morning, the Court in Munich has issued a decision. In that decision, basically, the court decided that InterDigital has consistently act in good phase under the front obligation at all times. The court also said Lenovo has systematically actively in hold out, and frankly, it’s not in combined of the front obligation. So, as a result, the court has issued the injunction of a patent that’s standard essential for both 4G and 5G. And unless if something happens, Lenovo will be prohibited from selling devices with those features in German market. Regarding how the company may behave, I don’t want to spec on Samsung – on Lenovo, how they will proceed from here. I can see Germany is obviously a very major market and this injunction applied to a pretty wide range of devices beyond the cell phones. So, I hope with this decision that Lenovo will come back and frankly, take a licensing and fair terms from us. And I am definitely hopeful.
Arjun Bhatia
Alright. Appreciate the color. Thank you.
Operator
Thank you. [Operator Instructions] And our next question comes from Anja Soderstrom of Sidoti. Your line is open.
Anja Soderstrom
Hi. Thank you for taking my question. Can you just – you talked about this in the past, but maybe go over again the different opportunities you have to reach your guidance for 2024.
Liren Chen
Yes. Hey. Good morning. This is Liren. So, we have multiple passes. On the smartphone side, just for example, we have OPPO negotiation where we will, as Rich just mentioned here, have has expired, which we are bringing renewed discussion with them. And then Lenovo was licensed through the UK court decision for the cellular side until end of last year. Now, the unlicensed as we announced this morning, we received court injunctions, and we hope to be able to, frankly, sign a long-term agreement with them. So, that’s just on the smartphone side. On the CE side, as we mentioned in the prepared remarks, we signed Samsung TV, which is the largest vendor in TV space. We are working diligently on the next multiple layers of TV vendors include LG, TCL and Hisense. So, on top of all the stuff here, we are also working on the Samsung arbitration, and we expect that to be finished before the end of the year. And if we are able to get a favorable judgment beyond the revenue recognition that will be a positive true-up pass.
Anja Soderstrom
Okay. Thank you. And when it comes to Huawei, how constructive are those discussions given you fairly recently signed an agreement with them?
Liren Chen
Yes. Probably negotiation is proceeding according to plan. And our last agreement expired the end of the year, and frankly, Huawei business has gone through a certain amount of period of up and down. So, we are currently in negotiation with them, and we are hopeful we will get a long-term deal down with us soon.
Anja Soderstrom
Okay. Thank you. That was all for me.
Operator
Thank you. [Operator Instructions] And our next question comes from Scott Searle of ROTH MKM. Your line is open.
Scott Searle
Hey. Good morning. Thanks for taking the questions. I apologize in advance, I was on the call late, so if you already covered this, but. Liren, in regard to the Lenovo injunction, what is the actual process and procedure there in terms of how that’s going to be implemented? And are there additional costs associated with it? I believe that there is an appeal period from their standpoint. So, can you walk us through the milestones timeline and the cost element?
Liren Chen
Yes. Hi Scott. Good morning. So, we don’t – I am not certain you were on the call when we were describing it earlier. So basically, the court has decided that we have acted in front manner consistently all the time. The Lenovo has systematic conduct sold out and their non-infant obligation and they are frankly, on-leading licensee. As a result, the court has issued injunction against them that covers devices with 4G and 5G features built in. So, there will be some procedure stuff which we are frankly working through and our intention is to enforce this injunction as quickly as we can. And you are also teat this is what they call a first insulin decision, which is automatically appealable. So, I don’t want to speculate on the Lenovo’s legal strategy, but that’s frankly up to them.
Scott Searle
Got it. And Liren, just to quickly follow-up on that front. This is in Germany, will that extend to the rest of the EU, or what is the plan there in terms of how you implement across the pan-European marketplace?
Liren Chen
Yes. Scott, this is the case that – this is a German pattern, and it’s a German court. So, just the decision will be limited to the German market. As you are aware, Scott, we do have other cases, including our PC, ITC in U.S. against them in different technology area. But this particular decision is Germany only.
Scott Searle
Got it. And two others, if I could, just the latest update in terms of video IPs licensing into the streaming and services model. Are there any updated thoughts, timelines in terms of how that’s evolving and the impact in ‘24 and ‘25?
Liren Chen
Yes. Hey Scott, we do view the video cloud service licensing as a very, very good, greenfield opportunity. We are proceeding according to plan, which we believe we have very valuable IP asset and frankly, very strong technology leadership. Regarding our direct financial impact, as of now, we are not projecting material impact to 2024. And if we have more update, we will share with you timely.
Scott Searle
Got it. And lastly, if I could, you have maintained the guidance range for the year of $620 million to $670 million. I am wondering if some things have kind of moved around in terms of higher probability versus lower probability. I am not sure if you can address it, but just kind of – I know there are multiple paths to get to that range if there are certain things that have materialized and become a little bit more confident about. Thanks.
Liren Chen
Yes. Hey Scott. As I said in my prepared remarks, when we issued the guidance beginning of the year, we feel very strongly that our business momentum has increased, and we have identified multiple past recent results. And now we have delivered a resounding strong quarter in Q1 for both the top line or adjusted EBITDA and EPS, and especially in the record recency and our key space. So, we feel very good about where we are, and we are on track to deliver the results. And as of now, we are not either predict the rest of the quarter other than we feel very confident about our ability to deliver for the year.
Scott Searle
Great. Thank you.
Operator
Thank you. This concludes the question-and-answer session. At this time, I would like to turn it back to Liren Chen for closing remarks.
Liren Chen
Thank you, operator. Before we close, I would like to thank all of our employees for their dedication and contribution to InterDigital as well as our many partners and licensees for an outstanding start to 2024. Thanks to everyone who joined our call today and we look forward to updating you on our progress next quarter.
Operator
This concludes today’s conference call. Thank you for participating and you may now disconnect.
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nterDigital, Inc. (NASDAQ:IDCC) Q1 2024 Earnings Conference Call May 2, 2024 10:00 AM ET
Company Participants
Raiford Garrabrant - Head, Investor Relations
Liren Chen - President and Chief Executive Officer
Rich Brezski - Chief Financial Officer
Conference Call Participants
Arjun Bhatia - William Blair
Anja Soderstrom - Sidoti
Scott Searle - ROTH MKM
Operator
Good day and thank you for standing by. Welcome to the InterDigital First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Raiford Garrabrant, Head of Investor Relations. Please go ahead.
Raiford Garrabrant
Good morning to everyone and welcome to InterDigital’s first quarter 2024 earnings conference call. I am Raiford Garrabrant, Head of Investor Relations for InterDigital. With me on today’s call are Liren Chen, our President and CEO; and Rich Brezski, our CFO. Consistent with prior calls, we will offer some highlights about the quarter and the company and then open up the call for questions. For additional details, you can access our earnings release and a slide presentation that accompany this call on our Investor Relations website.
Before we begin our remarks, I need to remind you that in this call, we will make forward-looking statements regarding our current beliefs, plans and expectations, which are not guarantees of future performance and are made only as of the date hereof. Forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from results and events contemplated by such forward-looking statements. These risks and uncertainties include those described in the Risk Factors section of our 2023 annual report on Form 10-K and in our other SEC filings. In addition, today’s presentation may contain references to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the supplemental materials posted to the Investor Relations section of our website.
With that taken care of, I will turn the call over to Liren.
Liren Chen
Thank you, Raiford. Good morning, everyone. Thank you for joining us today. On our last call, we provided annual guidance for 2024 revenue of between $620 million and $670 million. This guidance highlights the increasing momentum of our business and the multiple growth opportunity that we have identified and expect to achieve through the rest of the year. Today, I am pleased to share that we have made significant headwinds in achieving our goal and reconfirm our 2024 annual guidance. Revenue for the first quarter were $264 million, up by 30% year-over-year and above the high-end of our guidance. Our Q1 revenue was one of the highest in our history and an all-time high for our CE and our IT licensing program.
Through the quarter, we have made great progress on multiple fronts of our business. We signed 7 new license agreements. We enhanced our position as a leader in the application of AI in both wireless and video and we received several positive core decisions, which we believe will help us to advance negotiations with certain unlicensed smartphone OEMs. We began the quarter with a new landmark license with Samsung TV business. The agreement covers patents and our joint licensing program with Sony and introduced our own pattern across a range of video and Wi-Fi technologies. Samsung is a market leader in TV and this agreement highlights both the value of video and Wi-Fi innovation and the growth we continue to build in licensing the consumer electronics sector. I would emphasize that this new agreement is separate to the Samsung smartphone license. We announced at the start of 2023 that Samsung and InterDigital has agreed to renew the license for their smart TV to our portfolio.
The final term of the smartphone license includes how much spent on mass payouts are still the subject of arbitration hearing, which is on track to be held this summer with the final resolution expected by end of this year. The 7 new agreements that we signed in the first quarter reflect the momentum we continue to see across all our licensing programs and our strength in consumer electronics and our IT in particular. The revenue and recurring revenue in Q1 from our CE and our IT program were both record highs. With Samsung and other agreements that we closed in the quarter, we have increased the cumulative value of contracts that we have signed over the last 3 years to almost $2.7 billion, giving us an incredible strong base from which to drive new long-term agreements and pursue additional growth opportunities.
Staying on license, we are making significant progress in our effort to ensure that we received further compensation for our innovation from unlicensed smartphone OEMs. Earlier today, a German court issued a very positive decision for us in our dispute with Lenovo. The court ruled that Lenovo infringed one of our 4G and 5G standard essential patents that InterDigital has acted in a friend manner that Lenovo is an on-leading licensee who engaged in hold out and should therefore be enjoined in the German market. The injunction means that Lenovo will be prohibited from selling 4G and 5G contract devices in Germany. Also, as part of our dispute with OPPO, a German court also wrote that OPPO infringed Interdigital’s 4G and 5G standard issuance of patent in sued. The Interdigital has acted in a friend manner that OPPO is an on-leading licensee, the court also awarded injunction against OPPO. In India, in another trial against OPPO, we received yet another positive decision, but OPPO was ordered to pay royalties in the form of a security deposit to the court. The Indian court also heavily criticized and fined OPPO for delaying tactics during our negotiations and ordered as the trial be concluded before end of the year. We are encouraged by this recent development in our cases and we believe we have built significant momentum in our negotiations with both companies. As I have said many times before, we always prefer to sign long-term license through amicable negotiations, but we are ready to enforce our patent rights, if necessary.
Our strength as the fundamental innovator in critical technology, continue to underpin our progress. Our research team has long been recognized by the world leaders in the development of wireless and video technology. And increasingly, our leadership in AI is coming to the forefront. In Q1, one of our senior engineers was appointed to hedge the AI and machine learning standing committee of IEEE, the standard development automation, which leads the evolution of Wi-Fi. At this year’s Mobile World Congress in Barcelona, we showcased two demonstrations, which has AI at their heart. One was in partnership with Keysight, which use a newer network developed by our genres to demonstrate the application of AI in our 6G network. And a second combined advanced video compression and AI to significantly reduce energy consumption of streaming video while preserving picture quality.
Also at MWC, we demonstrated cutting-edge immersive video and haptic technology in a specific use case of eSports and showed our increasing leadership in integrated sensing and communications and emerging technology, which will be a pillar of 6G. Our research success continue to be reflected in the development of our global patent portfolio. Recently, we were confirmed among the top 25 companies globally that filed the most new pattern applications with European patent office last year. Our number of new applications filed with the EPO increased by 40% year-over-year in a clear indication of our success in translating our foundational innovation into patent assets. The strength of innovation and patent footprint give us an excellent platform to drive further growth in our existing licensing program and in green field opportunities such as cloud-based video services. And with our track record for delivering new license agreements with leading manufacturers such as Samsung, we believe we are in an excellent position to reach our financial target for the year.
With that, I’ll hand it over to Rich to talk you through the numbers in more details.
Rich Brezski
Thanks, Liren. Q1 was another outstanding quarter for InterDigital as our strong revenue growth drove both non-GAAP EPS and adjusted EBITDA to the high end of our guidance range. This growth was powered by new licensing agreements, most notably Samsung TV. These results support our long-term objective of delivering consistent revenue growth combined with strong margins. Total revenue increased 30% year-over-year with CE and IoT leading the way. Based on new licensing agreements reached in Q1, recurring revenue for CE and IoT reached an annualized run rate of almost $90 million, an increase of 57% year-over-year and has roughly doubled over the last 2 years. When combined with catch-up revenue of $160 million, CE and IoT total revenue for the quarter reached an all-time high at $183 million. This performance highlights our ability to deliver significant growth beyond the smartphone market.
Our adjusted EBITDA for the quarter of $130 million equates to an adjusted EBITDA margin close to 50%, consistent with our guidance. These results demonstrate the power of our business model. Our investments in fundamental technologies drive top line growth while the reuse of those technologies across multiple verticals delivers high margins and drives cash flow. Our strong performance in Q1 produced cash from operations of $51 million and free cash flow of $41 million. This strong cash flow, combined with a cash balance of nearly $1 billion, supports our continued return of capital to shareholders. In Q1, we repurchased approximately 300,000 shares for $29 million. We repurchased another 200,000 shares in April for a year-to-date total of roughly 0.5 million shares. Since we first paid our dividend in 2011, we have now returned approximately $1.8 billion to shareholders through share buybacks and dividends.
In that time, we reduced our outstanding share count by almost 45% from more than 45 million shares to just over 25 million shares. And with $246 million left on the current buyback authorization, we’re not done yet. Looking forward to Q2, we expect recurring revenue will include $93 million to $97 million of revenue from existing contracts plus any amounts we recognize from any new agreements we may sign over the balance of the quarter. Based only on existing contracts, we expect an adjusted EBITDA margin of about 38% and non-GAAP diluted earnings per share of $0.70 to $0.80. Any additional agreements would be additive to those totals. Our strong first quarter results have us on track to meet our full year 2024 targets, and we are reaffirming our prior guidance of revenue in the range of $620 million to $670 million.
We continue to expect an adjusted EBITDA margin of roughly 50% for the full year of 2024 and non-GAAP diluted earnings per share of $7.45 to $8.76. Before I conclude, I’d like to mention that we’ll be attending four conferences over the remainder of the second quarter, the Bank of America Global Tech Conference in San Francisco on June 4. And the William Blair Growth Stock Conference in Chicago on June 4, the IDEAS Investor Conference in New York on June 12 and the Roth 10th Annual London Conference on June 26 and 27. Please check with your representatives at those firms if you’d like to schedule a meeting.
With that, I’ll turn it back to Raiford.
Raiford Garrabrant
Thanks, Rich. At this point, operator, we are ready to take questions.
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] Our first question comes from Arjun Bhatia of William Blair.
Arjun Bhatia
Alright. Thank you, guys. Appreciate you taking the question. To start, Liren, maybe a couple of questions on the Samsung side. More on the smartphone side, not necessarily on the TV side. But as you think about just going through arbitration here over the summer and looking at a potential outcome later this year, how should we think about maybe the range of outcomes that you’re considering that could result from that arbitration? I mean, is there a possibility that prices are going up and maybe how is your royalty rate is coming up? And how do you handicap that? And then for Rich, the same thing on the Samsung smartphone side, can you just remind us how you’re accounting for the license revenue in the recurring line from Samsung thus far? And might that be something that’s contributing to the decline in smartphone recurring revenue. Thank you.
Liren Chen
Take one or two simple questions. So, on the Samsung smartphone arbitration, as we have discussed in the prior call, since having our customer for the smartphone side for actually a long time since 1995 and before they release the variables, with guidance. The last contract was a 10-year agreement and which covered frankly, the previous generation technology and not including very valuable assets like 5G and a lot of the advanced video technology we have done. So that agreement acts for December 31, 2022, and both parties has agreed through negotiations that they will renew the agreement without disruption and that we frankly couldn’t get a pricing agreed upon in time.
So we both agreed to do a binding arbitration that started January 1, 2023. We are, frankly, well into the process. The panel has been assembled and the hearing has been confirmed this summer and will be decided before the end of the year as the current projection. So regarding valuation for multiple reasons, we feel very confident that the value of portfolio has gone up, that Santa’s benefited more through the years compared to the time of the last agreement. So that obviously, we still need to have the arbitration to go through to confirm our belief.
And I’ll hand it over to Rich to comment on the revenue recognition side.
Rich Brezski
Yes. Thanks, Liren. On the rev rec, we’ve been recognizing since the first quarter of last year at level with the prior Samsung agreement, which is just shy of $80 million a year. That’s what we believe is a conservative estimate. We have effectively a license in place with Samsung, and we are just estimating what the ultimate outcome will be on a conservative basis. But because of the conservative nature of the GAAP requirement, we are certainly hopeful that we will have a positive true-up when it’s ultimately concluded. And as to the question on the decline in recurring revenue, I presume you mean ‘23 going into ‘24. So, based on what I just said, it’s not because of Samsung, but rather expiration of other agreements, most notably Huawei, which expired at the end of last year.
Arjun Bhatia
Yes. Perfect. Alright. Thank you. One more, if I can. It was interesting to hear the injunction against Lenovo and OPPO. And I am curious, in the past, Liren, to the extent you have experienced with these injunctions, how do you think they – or how have they may be changed behavior of some of these manufacturers in the past? I mean is it enough of an incentive to bring them to the negotiation table and say, hey, we want to strike a deal. Like how punitive can those injunctions be for these companies to get them to strike a deal with you?
Liren Chen
Yes. Hey Arjun. As we announced in a separate press this morning, the Court in Munich has issued a decision. In that decision, basically, the court decided that InterDigital has consistently act in good phase under the front obligation at all times. The court also said Lenovo has systematically actively in hold out, and frankly, it’s not in combined of the front obligation. So, as a result, the court has issued the injunction of a patent that’s standard essential for both 4G and 5G. And unless if something happens, Lenovo will be prohibited from selling devices with those features in German market. Regarding how the company may behave, I don’t want to spec on Samsung – on Lenovo, how they will proceed from here. I can see Germany is obviously a very major market and this injunction applied to a pretty wide range of devices beyond the cell phones. So, I hope with this decision that Lenovo will come back and frankly, take a licensing and fair terms from us. And I am definitely hopeful.
Arjun Bhatia
Alright. Appreciate the color. Thank you.
Operator
Thank you. [Operator Instructions] And our next question comes from Anja Soderstrom of Sidoti. Your line is open.
Anja Soderstrom
Hi. Thank you for taking my question. Can you just – you talked about this in the past, but maybe go over again the different opportunities you have to reach your guidance for 2024.
Liren Chen
Yes. Hey. Good morning. This is Liren. So, we have multiple passes. On the smartphone side, just for example, we have OPPO negotiation where we will, as Rich just mentioned here, have has expired, which we are bringing renewed discussion with them. And then Lenovo was licensed through the UK court decision for the cellular side until end of last year. Now, the unlicensed as we announced this morning, we received court injunctions, and we hope to be able to, frankly, sign a long-term agreement with them. So, that’s just on the smartphone side. On the CE side, as we mentioned in the prepared remarks, we signed Samsung TV, which is the largest vendor in TV space. We are working diligently on the next multiple layers of TV vendors include LG, TCL and Hisense. So, on top of all the stuff here, we are also working on the Samsung arbitration, and we expect that to be finished before the end of the year. And if we are able to get a favorable judgment beyond the revenue recognition that will be a positive true-up pass.
Anja Soderstrom
Okay. Thank you. And when it comes to Huawei, how constructive are those discussions given you fairly recently signed an agreement with them?
Liren Chen
Yes. Probably negotiation is proceeding according to plan. And our last agreement expired the end of the year, and frankly, Huawei business has gone through a certain amount of period of up and down. So, we are currently in negotiation with them, and we are hopeful we will get a long-term deal down with us soon.
Anja Soderstrom
Okay. Thank you. That was all for me.
Operator
Thank you. [Operator Instructions] And our next question comes from Scott Searle of ROTH MKM. Your line is open.
Scott Searle
Hey. Good morning. Thanks for taking the questions. I apologize in advance, I was on the call late, so if you already covered this, but. Liren, in regard to the Lenovo injunction, what is the actual process and procedure there in terms of how that’s going to be implemented? And are there additional costs associated with it? I believe that there is an appeal period from their standpoint. So, can you walk us through the milestones timeline and the cost element?
Liren Chen
Yes. Hi Scott. Good morning. So, we don’t – I am not certain you were on the call when we were describing it earlier. So basically, the court has decided that we have acted in front manner consistently all the time. The Lenovo has systematic conduct sold out and their non-infant obligation and they are frankly, on-leading licensee. As a result, the court has issued injunction against them that covers devices with 4G and 5G features built in. So, there will be some procedure stuff which we are frankly working through and our intention is to enforce this injunction as quickly as we can. And you are also teat this is what they call a first insulin decision, which is automatically appealable. So, I don’t want to speculate on the Lenovo’s legal strategy, but that’s frankly up to them.
Scott Searle
Got it. And Liren, just to quickly follow-up on that front. This is in Germany, will that extend to the rest of the EU, or what is the plan there in terms of how you implement across the pan-European marketplace?
Liren Chen
Yes. Scott, this is the case that – this is a German pattern, and it’s a German court. So, just the decision will be limited to the German market. As you are aware, Scott, we do have other cases, including our PC, ITC in U.S. against them in different technology area. But this particular decision is Germany only.
Scott Searle
Got it. And two others, if I could, just the latest update in terms of video IPs licensing into the streaming and services model. Are there any updated thoughts, timelines in terms of how that’s evolving and the impact in ‘24 and ‘25?
Liren Chen
Yes. Hey Scott, we do view the video cloud service licensing as a very, very good, greenfield opportunity. We are proceeding according to plan, which we believe we have very valuable IP asset and frankly, very strong technology leadership. Regarding our direct financial impact, as of now, we are not projecting material impact to 2024. And if we have more update, we will share with you timely.
Scott Searle
Got it. And lastly, if I could, you have maintained the guidance range for the year of $620 million to $670 million. I am wondering if some things have kind of moved around in terms of higher probability versus lower probability. I am not sure if you can address it, but just kind of – I know there are multiple paths to get to that range if there are certain things that have materialized and become a little bit more confident about. Thanks.
Liren Chen
Yes. Hey Scott. As I said in my prepared remarks, when we issued the guidance beginning of the year, we feel very strongly that our business momentum has increased, and we have identified multiple past recent results. And now we have delivered a resounding strong quarter in Q1 for both the top line or adjusted EBITDA and EPS, and especially in the record recency and our key space. So, we feel very good about where we are, and we are on track to deliver the results. And as of now, we are not either predict the rest of the quarter other than we feel very confident about our ability to deliver for the year.
Scott Searle
Great. Thank you.
Operator
Thank you. This concludes the question-and-answer session. At this time, I would like to turn it back to Liren Chen for closing remarks.
Liren Chen
Thank you, operator. Before we close, I would like to thank all of our employees for their dedication and contribution to InterDigital as well as our many partners and licensees for an outstanding start to 2024. Thanks to everyone who joined our call today and we look forward to updating you on our progress next quarter.
Operator
This concludes today’s conference call. Thank you for participating and you may now disconnect.
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InterDigital Announces Financial Results for First Quarter 2024
Source: GlobeNewswire Inc.?
InterDigital, Inc. (Nasdaq: IDCC), a mobile, video, and AI technology research and development company, today announced results for the quarter ended March 31, 2024.
"InterDigital made significant progress in first quarter towards our 2024 revenue guidance of $620 million to $670 million,” commented Liren Chen, President and CEO, InterDigital. “Revenue was $264 million for the quarter, one of the highest quarters in our history, and included an all-time high for our CE and IoT licensing program. With our landmark consumer electronics agreement with Samsung, we signed agreements with a cumulative value of almost $2.7 billion over the last three years, giving us an incredibly strong base from which to drive additional growth opportunities.”
First Quarter 2024 Financial Highlights, as compared to First Quarter 2023:
Three Months Ended
March 31,(in millions, except per share data)2024 2023 ChangeGAAP Results: Revenues$263.5 $202.4 30%Operating Expenses (a)$159.8 $83.1 92%Net income 1$81.7 $105.3 (22)%Net income 1 margin31% 52% (21) pptDiluted EPS 1$2.88 $3.58 (20)% Non-GAAP Results: Adjusted EBITDA 2$130.4 $154.8 (16)%Adjusted EBITDA margin 249% 76% (27) pptNon-GAAP Net income 3$94.5 $123.6 (24)%Non-GAAP EPS 3$3.58 $4.21 (15)% Additional Information: Revenue by type: Recurring revenues$96.9 $101.6 (5)%Catch-up revenues$166.7 $100.8 65%Revenue by program: Smartphone$80.3 $186.2 (57)%CE, IoT/Auto$182.5 $16.1 1,035%Other$0.7 $0.1 1,184% (a) Includes revenue share costs of $69.0 million and $1.1 million in first quarter 2024 and 2023, respectively.
Return of Capital to Shareholders
(in millions, except per share data)
Share Repurchases Dividends Declared Total Return
of Capital
Shares Value Per Share Value First quarter 20240.3 $29.0 $0.40 $10.2 $39.2
Near Term Outlook
The Company has reaffirmed its full year 2024 outlook and provided an initial outlook for second quarter 2024 in the table below. The outlook for second quarter 2024 is based on existing licenses only, and any new agreements that might be reached over the balance of the second quarter would be additive. The outlook for full year 2024 includes both existing licenses and the potential for new agreements over the balance of the year.
(in millions, except per share data)Q2 2024 Full Year 2024Revenue$93 - $97 $620 - $670Adjusted EBITDA 2(a)$35.5 - $38.0 $310 - $345Diluted EPS 1(a)$0.20 - $0.30 $4.95 - $6.15Non-GAAP EPS 3(a)$0.70 - $0.80 $7.45 - $8.76 (a) Includes revenue share costs of $3 million for Q2 2024 and $80 million to $90 million for full year 2024.
Conference Call Information
InterDigital will host a conference call on Thursday, May 2, 2024 at 10:00 a.m. ET to discuss its first quarter 2024 financial performance and other company matters.
For a live Internet webcast of the conference call, visit www.interdigital.com and click on the “Webcast” link on the Investors page. The company encourages participants to take advantage of the Internet option.
For telephone access to the conference call, visit www.interdigital.com and click on the “Dial In Registration” link on the Investors page. Registration is necessary to obtain a dial in phone number and PIN to join.
An Internet replay of the conference call will be available on InterDigital’s website under Events in the Investors section. The replay will be available for one year.
About InterDigital®
InterDigital is a global research and development company focused primarily on wireless, video, artificial intelligence (“AI”), and related technologies. We design and develop foundational technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services. We license our innovations worldwide to companies providing such products and services, including makers of wireless communications devices, consumer electronics, IoT devices, cars and other motor vehicles, and providers of cloud-based services such as video streaming. As a leader in wireless technology, our engineers have designed and developed a wide range of innovations that are used in wireless products and networks, from the earliest digital cellular systems to 5G and today’s most advanced Wi-Fi technologies. We are also a leader in video processing and video encoding/decoding technology, with a significant AI research effort that intersects with both wireless and video technologies. Founded in 1972, InterDigital is listed on Nasdaq.
InterDigital is a registered trademark of InterDigital, Inc.
For more information, visit the InterDigital website: www.interdigital.com.
For additional financial measures, refer to our first quarter 2024 Form 10-Q and the financial metrics tracker, which are available on the Investor Relations section of our website.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include information regarding our current beliefs, plans and expectations. Words such as “believe,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “forecast,” “goal,” “could,” "would," "should," "if," "may," "might," "future," "target," "trend," "seek to," "will continue," "predict," "likely," "in the event," and variations of any such words or similar expressions are intended to identify such forward-looking statements.
Forward-looking statements are made on the basis of management’s current views and assumptions and are not guarantees of future performance. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results, and actual events that occur, to differ materially from results contemplated by the forward-looking statements. These risks and uncertainties include, but are not limited to: (i) unanticipated delays, difficulties or accelerations in the execution of patent license agreements; (ii) the resolution of current legal proceedings, including any awards or judgments relating to such proceedings, additional or related legal proceedings, including appeals, changes in the schedules or costs associated with such proceedings or adverse rulings; (iii) our ability to leverage our strategic relationships and secure new patent license agreements on acceptable terms; (iv) our ability to enter into sales and/or licensing partnering arrangements for certain of our patent assets; (v) our ability to expand our revenue opportunities by entering into licensing arrangements with video streaming and other cloud-based service providers; (vi) our ability to enter into partnerships with leading inventors and research organizations and identify and acquire technology and patent portfolios that align with our roadmap; (vii) our ability to commercialize our technologies and enter into customer agreements; (viii) the failure of the markets for our current or new technologies to materialize to the extent or at the rate that we expect; (ix) our continued ability to develop new technologies and secure new patents, including the risk of unexpected delays or difficulties related to the development of our technologies; (x) risks associated with our capital allocation strategies, including risks associated with our planned dividend payments and share repurchases; (xi) changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the 2017 Tax Cuts and Jobs Act, as well as further guidance that may be issued regarding such act; (xii) risks related to the potential impact of new accounting standards on our financial position, results of operations or cash flows; (xiii) failure to accurately forecast the impact of our restructuring activities on our financial statements and our business; (xiv) the timing and impact of potential administrative and legislative matters; (xv) changes or inaccuracies in market projections; (xvi) our ability to obtain liquidity though debt and equity financings; (xvii) the potential effects that macroeconomic uncertainty could have on our financial position, results of operations and cash flows; (xviii) impacts from acts of terrorism, war or political or civil unrest, or any responses thereto, in the United States or elsewhere; (xix) changes in our business strategy; (xx) changes or inaccuracies in our expectations with respect to royalty payments by our customers and (xxi) risks related to our assumptions and application of relevant accounting standards, including with respect to revenue recognition.
We undertake no duty to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law.
Footnotes
1 Throughout this press release, net income and diluted earnings per share (“EPS”) are attributable to InterDigital, Inc. (e.g., after adjustments for non-controlling interests), unless otherwise stated. Net income margin is net income attributable to InterDigital, Inc. over total revenues.
2 Adjusted EBITDA and Adjusted EBITDA margin are supplemental non-GAAP financial measures that InterDigital believes provide investors with important insight into the Company's ongoing business performance. InterDigital defines Adjusted EBITDA as net income attributable to InterDigital Inc. plus net loss attributable to non-controlling interest, income tax (provision) benefit, other income (expense) & interest expense, depreciation and amortization, share-based compensation, and other items. Other items include restructuring costs, impairment charges and other non-recurring items. Adjusted EBITDA margin is Adjusted EBITDA over total revenues. These non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The presentation of these financial measures, which are not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. A reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure is provided below.
3 Non-GAAP net income, Non-GAAP EPS, and Non-GAAP weighted-average diluted shares are supplemental non-GAAP financial measures that InterDigital believes provides investors with important insight into the Company's ongoing business performance. InterDigital defines Non-GAAP net income as net income attributable to InterDigital, Inc. plus share-based compensation, acquisition related amortization, depreciation and amortization, restructuring costs, impairment charges and one-time adjustments, losses on extinguishments of long-term debt, the related income tax effect of the preceding items, and adjustments to income taxes. Non-GAAP EPS is defined as Non-GAAP net income divided by Non-GAAP weighted average diluted shares, which adjusts the weighted average number of common shares outstanding for the dilutive effect of the Company's convertible notes, offset by our hedging arrangements. InterDigital’s computation of these non-GAAP financial measures might not be comparable to similarly named measures reported by other companies. The presentation of these financial measures, which are not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. A reconciliation of each of these metrics to its most directly comparable GAAP financial measure is provided below.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
(unaudited) For the Three Months Ended March 31, 2024 2023 Revenues$263,542 $202,373 Operating expenses: Research and portfolio development 49,375 49,429 Licensing 96,589 21,368 General and administrative 13,840 12,315 Total operating expenses 159,804 83,112 Income from operations 103,738 119,261 Interest expense (11,922) (12,087)Other income, net 9,247 13,191 Income before income taxes 101,063 120,365 Income tax provision (19,411) (16,845)Net income$81,652 $103,520 Net loss attributable to noncontrolling interest — (1,739)Net income attributable to InterDigital Inc.$81,652 $105,259 Net income per common share — Basic$3.20 $3.66 Weighted average number of common shares outstanding — Basic 25,510 28,780 Net income per common share — Diluted$2.88 $3.58 Weighted average number of common shares outstanding — Diluted 28,341 29,372 Cash dividends declared per common share$0.40 $0.35
SUMMARY CONSOLIDATED CASH FLOWS
(in thousands)
(unaudited) For the Three Months Ended March 31, 2024 2023 Cash flows from operating activities: Net income$81,652 $103,520 Non-cash adjustments 8,459 (4,004)Working capital changes (39,338) (127,368)Net cash provided by (used in) operating activities 50,773
(27,852)Cash flows from investing activities: Net sales (purchases) of short-term investments 24,616
(5,982)Capitalized patent costs and purchases of property and equipment (9,417) (8,481)Long-term investments 1,576 — Net cash provided by (used in) investing activities 16,775
(14,463)Cash flows from financing activities: Repurchase of common stock (28,868) (203,381)Dividends paid (10,226) (10,384)Other (10,225) (4,371)Net cash used in financing activities (49,319) (218,136)Net increase (decrease) in cash, cash equivalents and restricted cash 18,229 (260,451)Cash, cash equivalents and restricted cash, beginning of period 442,961 703,161 Cash, cash equivalents and restricted cash, end of period$461,190 $442,710
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited) MARCH 31, 2024 DECEMBER 31, 2023Assets Cash, cash equivalents and short-term investments$984,635 $1,006,356Accounts receivable 145,629 117,292Prepaid and other current assets 85,172 43,976Property & equipment and patents, net 318,216 324,567Other long-term assets, net 273,369 278,623Total assets$1,807,021 $1,770,814Liabilities and Shareholders' equity Current portion of long-term debt$579,369 $578,752Current deferred revenue 155,966 153,597Other current liabilities 168,484 148,779Long-term deferred revenue 193,955 223,866Long-term debt & other long-term liabilities 84,956 84,271Total liabilities 1,182,730 1,189,265Total shareholders' equity 624,291 581,549Total liabilities and shareholders' equity$1,807,021 $1,770,814
RECONCILIATION OF NON-GAAP MEASURESThe table below presents a reconciliation of Adjusted EBITDA to net income attributable to InterDigital, Inc., the most directly comparable GAAP financial measure: For the Three Months Ended March 31, Outlook (in thousands) (in millions) 2024 2023 Q2 2024 Full Year 2024Net income attributable to InterDigital, Inc.$81,652 $105,259 $5.5 - $8.0 $140 - $175Net loss attributable to non-controlling interest — (1,739) — —Income tax provision 19,411 16,845 1.5 40 - 50Other income (expense) & interest expense 2,675 (1,104) 0.5 5 - 15Depreciation and amortization 17,240 19,526 18.0 73Share-based compensation 9,386 7,790 10.0 42Other items (a) — 8,237 — —Adjusted EBITDA 2$130,364 $154,814 $35.5 - $38.0 $310 - $345 (a) Other items in the above table includes a $5.7 million one-time charge for a net litigation fee reimbursement and a $2.5 million one-time impairment on our patents held for sale during the three months ended March 31, 2023.
The table below presents a reconciliation of Non-GAAP net income to net income attributable to InterDigital, Inc., the most directly comparable GAAP financial measure:
For the Three Months Ended March 31, Outlook (in thousands, except for per share data) (in millions, except for per share data) 2024 2023 Q2 2024 Full Year 2024Net income attributable to InterDigital, Inc.$81,652 $105,259 $5.5 - $8.0 $140 - $175Share-based compensation 9,386 7,790 10.0 42Acquisition related amortization 8,421 10,268 8.0 33Other operating items (a) — 8,237 — —Other non-operating items (b) 674 (158) (1.0) —Related income tax and noncontrolling interest effect of above items (3,881) (6,739) (4.0) (16)Adjustments to income taxes (1,708) (1,042) — —Non-GAAP net income 3$94,544 $123,615 $18.5 - $21.0 $199 - $234 Weighted average dilutive shares - GAAP 28,341 29,372 27.8 28.3Less: Dilutive impact of the Convertible Notes 1,942 — 1.5 1.6Weighted average dilutive shares - Non-GAAP 3 26,399 29,372 26.3 26.7 Non-GAAP EPS 3$3.58 $4.21 $0.70 - $0.80 $7.45 - $8.76 (a) Other items in the above table includes a $5.7 million one-time charge for a net litigation fee reimbursement and a $2.5 million one-time impairment on our patents held for sale during the three months ended March 31, 2023.
(b) Other non-operating items includes net (gains) or losses from observable price changes of our long-term strategic investments.
CONTACT:InterDigital, Inc. Email: investor.relations @diplomat2
InterDigital awarded injunction against Lenovo
Source: GlobeNewswire Inc.?
InterDigital, Inc. (Nasdaq: IDCC), a mobile, video and AI technology research and development company, today announced it has been awarded an injunction against Lenovo by a court in Germany.
The Regional Court in Munich held that Lenovo infringes InterDigital’s patent-in-suit covering 4G and 5G devices, that InterDigital has acted in a FRAND manner at all times, and that Lenovo is an unwilling licensee who has not acted in line with widely recognized FRAND principles. This is a first instance decision which can be appealed.
“The strength of our portfolio and the quality of our standards contributions have once again been recognized by a court,” commented Josh Schmidt, Chief Legal Officer, InterDigital. “Following the court’s finding that Lenovo’s behavior constitutes hold-out, we hope Lenovo reverses course and finally takes a fair and reasonable license.”
About InterDigital®
InterDigital is a global research and development company focused primarily on wireless, video, artificial intelligence (“AI”), and related technologies. We design and develop foundational technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services. We license our innovations worldwide to companies providing such products and services, including makers of wireless communications devices, consumer electronics, IoT devices, cars and other motor vehicles, and providers of cloud-based services such as video streaming. As a leader in wireless technology, our engineers have designed and developed a wide range of innovations that are used in wireless products and networks, from the earliest digital cellular systems to 5G and today’s most advanced Wi-Fi technologies. We are also a leader in video processing and video encoding/decoding technology, with a significant AI research effort that intersects with both wireless and video technologies. Founded in 1972, InterDigital is listed on Nasdaq.
InterDigital is a registered trademark of InterDigital, Inc.
For more information, visit: www.interdigital.com.
InterDigital Contact:
Richard Lloyd
Email: richard.lloyd@interdigital.com
+1 (202) 349-1716