InterDigital Inc (IDCC)

[rmarchma]

Mickey re contingency deals you asked:

..."Is it a deal if both sides agree that the Samsung rate will be the rate agreed on less if any discount? Is that a deal or just as I stated a contingency deal that until the Samsung rate is established just a pending deal?".

To be a legally valid contract between parties there must be an offer by one party and acceptance by the other party, and the exchange of value, ie "consideration". A few excerpts from a legal article on making a legally valid contracts as follows:

"Most contracts only need to contain two elements to be legally valid:

All parties must be in agreement (after an offer has been made by one party and accepted by the other).
Something of value must be exchanged -- such as cash, services, or goods (or a promise to exchange such an item) -- for something else of value.

Agreement Between the Parties
Although it may seem like stating the obvious, an essential element of a valid contract is that all parties must agree on all major issues. In real life, there are plenty of situations that blur the line between a full agreement and a preliminary discussion about the possibility of making an agreement. To help clarify these borderline cases, the law has developed some rules defining when an agreement legally exists.

Offer and Acceptance
The most basic rule of contract law is that a legal contract exists when one party makes an offer and the other party accepts it. For most types of contracts, this can be done either orally or in writing.

Exchange of Things of Value
In addition to both parties' agreement to the terms, a contract isn't valid unless both parties exchange something of value in anticipation of the completion of the contract.

Consideration Defined
The "thing of value" being exchanged -- which every law student who ever lived has been taught to call "consideration" -- is most often a promise to do something in the future, such as a promise to perform a certain job, or a promise to pay a fee for a job."

http://www.nolo.com/article.cfm/pg/1/objectId/EEF92280-11CF-4910-8DECF67369130844/catId/C9502B11-CF56-4AF7-9E2A8D8EA9FCF85E/111/277/257/ART/

Now back to your scenario of a contingency deal between Nokia and IDCC, pending the licensing of Samsung. First it would appear that in your scenario there is an offer and an acceptance. However, there might be a question over the exchange of consideration, especially since Nokia has not paid IDCC anything yet. However, consideration can also be a future promise to pay. If Nokia has agreed to pay whatever rate Samsung pays after they enter a 3G license with IDCC, less a volume discount, then in my nonlegal opinion that would constitute legal "consideration".

In your scenario, I think there is a legally valid deal/agreement/contract with a contingency clause. However in the Samsung ITC proceedings, the Samsung lawyer asked directly if IDCC had a 3G agreement with Nokia, and the answer was NO. Therefore, I don't think your opinion about an existing contingency agreement between Nokia and IDCC is correct. If it were correct, I don't think IDCC could answer that there is no 3G agreement with Nokia, because in your scenario it appears that a valid agreement would exist.

A past example of an an IDCC legal agreement, which contained a contingency clause, was the Nokia 2G agreement. Nokia had agreed to pay IDCC a recurring royalty after Jan. 1, 2000 at whatever royalty rate its major competitors Ericy or Motorola agreed to pay IDCC. We all know what kind of problems that particular contingency clause created, but it was still a valid legal agreement and Nokia ultimately paid IDCC 2G royalties.