Wednesday, October 12, 2005 7:06:51 AM
Corp: After reading your post, which appears to have quotes from the Courts decision, I now understand why the Court ordered arbitration and did not make any decision regarding amounts owed. Like our Nokia arbitration, which required contract interpretation, this case requires an interpretation of the terms of the “Reimbursement Agreement”.
As your post states “InterDigital was required to reimburse Federal’s defense costs (even those paid before the agreement) by paying Federal 9% of the first $50 million of the “agreed-upon settlement” for the patent claims and 10% of everything above $50 million of the “agreed-upon settlement” for the patent claims in the Ericsson litigation;” According to this statement it appears that Federal’s reimbursement is dependent on the amount of the “agreed-upon settlement” in the Ericcson litigation. Thus it would appear that what must be resolved is exactly what was meant by the term “agreed-upon settlement”.
Apparently, the $29 million claimed by Federal was based on the expected total value to IDCC of the settlement, i.e. projected payments by both Ericsson and Sony-Ericsson for the license period, while IDCC considers that only $3.4 million is due based on their argument that “Federal is entitled to reimbursement based only on certain portions of amounts received by the Company from Ericsson”.
I am comparing it to the Nokia arbitration, because like the “trigger” issue the first thing that must be determined is whether the Reimbursement Agreement covers only the Ericsson’s license, or also includes the Sony-Ericsson license; and then exactly what payments under the license(s) should be included when applying the percentages in calculting the reimbursement.
As your post states “InterDigital was required to reimburse Federal’s defense costs (even those paid before the agreement) by paying Federal 9% of the first $50 million of the “agreed-upon settlement” for the patent claims and 10% of everything above $50 million of the “agreed-upon settlement” for the patent claims in the Ericsson litigation;” According to this statement it appears that Federal’s reimbursement is dependent on the amount of the “agreed-upon settlement” in the Ericcson litigation. Thus it would appear that what must be resolved is exactly what was meant by the term “agreed-upon settlement”.
Apparently, the $29 million claimed by Federal was based on the expected total value to IDCC of the settlement, i.e. projected payments by both Ericsson and Sony-Ericsson for the license period, while IDCC considers that only $3.4 million is due based on their argument that “Federal is entitled to reimbursement based only on certain portions of amounts received by the Company from Ericsson”.
I am comparing it to the Nokia arbitration, because like the “trigger” issue the first thing that must be determined is whether the Reimbursement Agreement covers only the Ericsson’s license, or also includes the Sony-Ericsson license; and then exactly what payments under the license(s) should be included when applying the percentages in calculting the reimbursement.
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