The King of Prussia, Pa.-based InterDigital Communications Corp. said its Tantivy Communications Inc. subsidiary has filed a patent-infringement lawsuit against Lucent Technologies Inc. Tantivy alleges in the suit that Lucent has violated seven of its patents involving a wireless communications standard known as CDMA2000. Lucent, which is based in Murray Hill, N.J., manufactures equipment that uses the standard. The suit, which was filed in U.S. District Court for the Eastern District of Texas, seeks damages for past infringement, an injunction against future infringement and interest, costs, and attorneys' fees.
NOK is licensed for all standards. NOK'a 3G CDMA2000 infrastructure obligation could be triggered by Lucent,notably since E and S/E 2G triggers per below extract are for GSM/GPRS/TDMA. Don't recall that Samsung is licensed for CDMA or CDMA2000. NOK's MFL could trigger Samsung to include CDMA2000 product sales.
Extract from 2002 Interdigital Annual Report (disputed by NOKIA)...
The license agreements with Ericsson and Sony Ericsson establish the financial terms necessary to define the royalty obligations of Nokia Corporation (Nokia) and Samsung Electronics Co. Ltd. (Samsung) on sales of 2G GSM/TDMA and 2.5G GSM/GPRS/TDMA products under their existing agreements with us. Under the most favored licensee (MFL) provision applicable to their respective patent licenses, both companies are obligated to pay royalties to us on sales of covered products from January 1, 2002 by reference to the terms of the Ericsson and Sony Ericsson licenses. The MFL terms include provisions for a period of review, negotiation, and dispute reso- lution with regard to the determination of the royalty obligations of both Nokia and Samsung. Based on the Company’s application of the MFL provision, currently available third party estimates of Nokia’s and Samsung’s sales of covered products in 2002, and the Company’s assumptions regarding such items as Nokia’s and Samsung’s sales mix, selling prices, and market share, the Company projects that Nokia’s royalty obligation for 2002 could be in the range of $100 million to $120 million and Samsung’s royalty obligation for 2002 could be in the range of $22 million to $27 million. Further, based on the application of the MFL provision and assumptions noted above, recent market forecasts, and the advance payment of royalties (net of related discounts and any applicable credits) consistent with the terms of the Ericsson and Sony Ericsson agreements, the Company projects that 2003 royalty revenue from Nokia could be in the range of $80 million to $90 million, 2003 royalty revenue from Samsung could be in the range of $20 million to $24 million, and the aggregate advance royalty payments from Nokia and Samsung for 2003 and 2004 could be in the range of $180 million to $220 million. Once these initial prepayments are exhausted, Nokia and Samsung can either make additional advance royalty payments (net of related discounts and any applicable credits) for discreet twenty-four month periods, or pay royalties at undiscount- ed base royalty rates on sales through 2006. The Company will not record revenue associated with the Nokia and Samsung license agreements until all elements required for revenue recognition are met.
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