This from the NEC 3G/CDMA2000 license with IDCC. This wording explains how the process works when a product is manufactured by a third party, like HTC...
Purchase of Licensed Products.
If Licensee or any of its Affiliates purchases Licensed Covered Subscriber Units (including Modules) or Covered Infrastructure Units for incorporation into Licensee's or its Affiliates' Covered Subscriber Units or Covered Infrastructure Units, ("Licensed Products"), either in modified or unmodified form, Licensee shall receive a royalty credit equal to the amount of the per unit royalty ... paid to ITC by the manufacturer of such Licensed Product, such credit not to exceed the amount of the per unit royalty due by Licensee hereunder for the ultimate Covered Subscriber Unit or Covered Infrastructure Unit sold by Licensee or its Affiliates, in which such Licensed Product, in the same or modified form, is incorporated. As used herein, Licensed Product shall mean a Covered Subscriber Unit (including Module) or Covered Infrastructure Unit compliant with one or more Covered Standards manufactured by a third party under a license from ITC under the Licensed Patents and not known by Licensee at the time of purchase of the Licensed Product to be other than in good standing (i.e., not in default), and for which the third party licensee has paid ITC the per unit royalty for the Licensed Product. For the purposes of determining the credit, Licensee shall, in its royalty report, specify the number of Licensed Products purchased, the date purchased, and from whom such Licensed Products were purchased. ITC will then notify Licensee of the applicable credit, which Licensee may apply in its subsequent royalty reports to ITC until exhausted. ITC may also notify Licensee if the third party licensee is in default of its obligations under the third party license with ITC and that the credit as to future sales by Licensee shall not be given unless and until such third party licensee cures such default...
Resale.
If Licensee or its Affiliates (i) purchases Covered Subscriber Units or Covered Infrastructure Units from a third party that, under a license agreement executed subsequent to the Effective Date, is licensed under the Licensed Patents by ITC to manufacture, have made, sell and distribute such Covered Subscriber Units or Covered Infrastructure, and (ii) resells without modification, addition or enhancement, such purchased Covered Subscriber Units or Covered Infrastructure Units as such, no royalty shall be payable by Licensee so long as said third party license agreement includes express provisions under whichpurchasers which are original equipment manufacturers receive pass through rights under the Licensed Patents, including resale rights. If Licensee or its Affiliates purchase products from an entity meeting the above requirements except that (i) the applicable license was entered into prior to the Effective Date or (ii) the applicable license agreement (whether entered before or after the Effective Date) does not have the aforementioned resale rights, Licensee shall be given a credit for the per unit royalty paid by such entity, if any, using the same procedure, terms and conditions set forth in Article 3.2. Such credit shall not exceed the amount of royalty owed by Licensee. Licensee shall in its quarterly royalty reports, specify (i) the number of such Covered Subscriber Units or Covered Infrastructure Units resold by Licensee and its Affiliates during the quarter, (ii) the date of purchase of such resold Covered Subscriber Units or Covered Infrastructure Units, and (iii) from whom such resold Covered Subscriber Units or Covered Infrastructure Units were purchased.
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