InterDigital Inc (IDCC)

[olddog967]

mickey: I do’t know why you have suddenly become interested in the old 1994 settlement agreement with QCOM.

I believe the sentence you are quoting is not from the QCOM/IDCC settlement agreement, but is from QCOM's licenses with device manufacturers.

For some background, as noted in IDCC’s 2003 10-K:

"Additionally, in 1994 we entered into a paid-up CDMA-based patent license agreement with Qualcomm, Inc. (Qualcomm) that is limited in scope. The Qualcomm license excludes, among other things, any rights under our patents as regards TDMA standards, any rights under any of our patent applications filed after March 7, 1995, any rights under the patents and applications subsequently acquired, such as was the case with Windshift, and any rights to any patents relating to cellular overlay and interference cancellation. The Qualcomm license agreement grants Qualcomm the paid-up right to grant sub-licenses under designated patent and patent applications to Qualcomm’s customers. For some of our patents, Qualcomm’s sublicensing rights are limited to those situations where Qualcomm is selling ASICs to the customer. For a limited number of patents as to which applications were filed prior to March 8, 1995, Qualcomm may grant licenses under such ITC patents regardless of whether the customer is also purchasing an ASIC from Qualcomm. Based on these limitations, Qualcomm is not licensed under either all of our patents that we believe are essential to 3G, including cdma2000, or all of the inventions which we believe will be essential and which are contained in pending patent applications. The proportion of essential Company patents under which Qualcomm is licensed has diminished substantially over time as the Company has been inventing and acquiring technology at an accelerating rate since early 1995.

http://ir.interdigital.com/Cache/1500085339.PDF?O=PDF&T=&Y=&D=&FID=1500085339&iid=4103938

An example of QCOM license terms regarding the IDCC patents, including the the same wording as your sentence is their 2000 license agreement with Axesstel, Inc. [see highlighted subpart c]:


“5. QUALCOMM LICENSE.
 
5.1.1    InterDigital’s Patents. The license granted by QUALCOMM under Section 5.1 with respect to InterDigital’s Patents is subject to all other limitations set forth in this Agreement which are applicable to all of QUALCOMM’s Intellectual Property licensed hereunder and is also subject to the following limitations:
 
a.    No provision set forth herein shall be construed so as to grant any right or license under InterDigital’s Included Patents with respect to time division multiple access (TDMA) technology; provided, however, that such limitations shall not in any way limit any of the rights granted under this Agreement to utilize InterDigital’s Patents to implement the CDMA (or non-TDMA) aspects of any Subscriber Units, even if such Subscriber Units include TDMA; provided, however, in such case only the non-TDMA use of such Subscriber Unit will be licensed under InterDigital’s Patents. By way of example, if a Subscriber Unit can operate in both IS-54 (TDMA) and IS-95 (CDMA) modes, the use of such Subscriber Unit in the IS-54 TDMA mode would not be licensed.
 
b.    With respect to those Subscriber Units manufactured and Sold by LICENSEE which do not incorporate CDMA ASICs purchased from QUALCOMM (the “Non-CDMA ASIC Subscriber Units”), the license granted by QUALCOMM under InterDigital’s Patents may terminate in accordance with the provisions set forth below:
 
i.    After November 2, 1996. If, at any time after November 2, 1996, LICENSEE (or its Affiliate) initiates a CDMA patent infringement lawsuit against InterDigital or its affiliates (or their customers) asserting that any product manufactured and sold by InterDigital for use in non-IS-95 based wireless applications infringes any patents and LICENSEE (or its Affiliate) does not prevail in such lawsuit, then the license under InterDigital’s Patents granted by QUALCOMM to LICENSEE under this Agreement, with respect only to Non-CDMA ASIC Subscriber Units, shall immediately terminate.
 
ii.    Subscriber Units that Contain QUALCOMM’s CDMA ASICs. Notwithstanding whether or not the license under InterDigital’s Patents terminates as to Non-CDMA ASIC Subscriber Units, as set forth in paragraph b. i. above, Subscriber Units manufactured and Sold by LICENSEE which do incorporate CDMA ASICs purchased from QUALCOMM will remain licensed under InterDigital’s Patents pursuant to Section 5.1.

 c.    The license under InterDigital’s Patents is limited to use in Wireless Applications which spread the CDMA signal over not more than a 10 MHz bandwidth.”
 
https://www.sec.gov/Archives/edgar/data/1092492/000119312504140764/dex103.htm


In writing PLA’s, normal words/phrases are capitalized when the agreement has a specific definition for the word/phrase. In your sentence the phrase“ InterDigital’s Patents” has the following specific definition:

““InterDigital’s Patents” means (i) with respect to those Subscriber Units Sold by LICENSEE which incorporate CDMA ASICs purchased from QUALCOMM, the InterDigital Included Patents and (ii) with respect to those Subscriber Units Sold by LICENSEE which do not incorporate CDMA ASICs purchased from QUALCOMM, InterDigital’s Five Patents.”

As noted the definition contains it’s own capitalized phrases, which in regard to IDCC’s patents are “InterDigital Included Patents” and “InterDigital’s Five Patents” . These have their own definitions, which includes another patent phrase “Subsequently Issued InterDigital Patents”.


As you can see, in trying to legally understand what the sentence means things can be quite complicated. My simple explanation is that QCOM CDMA chips had features covered by certain IDCC patents. IDCC agreed to license these patents to QCOM. In addition, IDCC agreed that when these chips were sold to device manufacturers they would have a sublicense from IDCC, thereby preventing IDCC from filing an infringement suit against the device manufacturers. In addition, the “not more than a 10 MHz bandwidth” wording indicates that based on bandwidth standards the sub license was limited to chips used in the device manufacturers: 2G based CDMA , 3G WCDMA, and some 4G LTE products.