InterDigital Inc (IDCC)

[mschere]

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Lucent

In March 2004, Tantivy Communications, Inc., one of our wholly-owned subsidiaries, filed a lawsuit in the United States District Court for the Eastern District of Texas against Lucent Technologies, Inc. (Lucent), a leading manufacturer of cdma2000 infrastructure equipment. The case was originally based on our assertions of infringement by Lucent of nine of Tantivy’s U.S. patents. The lawsuit sought damages for past infringement and an injunction against future infringement, as well as interest, costs and attorneys’ fees. Lucent responded to the lawsuit denying any infringement, and sought a declaration of non-infringement and alleged that the patents were invalid and requested attorneys’ fees and costs.

In November 2005, Tantivy and Lucent agreed to dismiss the patent infringement litigation between them and, together with IDCC, entered into a combined patent license and technology agreement. Under the terms of the agreement, Lucent is obligated to pay approximately $14 million over a period of approximately 5 years. Tantivy granted a patent license to Lucent under only those patents which were involved in the litigation being dismissed covering Lucent’s cdma2000 infrastructure products. In addition, IDCC and Lucent agreed to cooperate on advanced technology programs.


In addition, in 2005 we also signed 2G/3G patent license agreements with Arima Communications, Quanta Computer Inc., and Lucent Technologies Inc. (Lucent), as well as technology solutions agreements with Philips Semiconductors B.V. (Philips) and Infineon Technologies AG (Infineon) that will provide revenue contributions in 2006.