Replies to post #107759 on InterDigital Inc (IDCC)

[Data_Rox]

Ranger - another reference to thousands...

from the 7/23/03 CC

(MO...."lo-saver" is "most favored")

MICHAEL CROTTY (ph): Couple of questions. Firstly, is Nokia contractually precluded from challenging the validity of all or any of your patents?

BILL MERRITT: I can't get into the terms of -- you know, we don't get into the specific royalty terms of the Nokia agreement. But they certainly have not taken any such action.

MICHAEL CROTTY (ph): But potentially, there's nothing -- potentially there's nothing contractually that would preclude them from doing so?

BILL MERRITT: Well, you know, it's -- unfortunately, it's one of those complicated questions because there's all sorts of law about that type of thing and it's not something that I can get into, the (inaudible) or the -- lots of -- lots of either confidential or case positioning type of stuff.

MICHAEL CROTTY (ph): OK. OK. Although, I mean, I would think something like that would be relatively straightforward. I mean, either there's a term in the contract that says they can do that or there's a term that says they can't?

BILL MERRITT: Well, one of the things ...

MICHAEL CROTTY (ph): (inaudible).

BILL MERRITT: ... to think about with respect to that is, you know, this is not a portfolio that is a single patent portfolio, covering a single invention. We've got over a hundred some odd U.S. TDMA (ph) patents which runs into a few thousand when you look at different numbers ...

RICK TILDEN: Worldwide.

BILL MERRITT: ... worldwide patents. So, you know, it's -- and it -- and Nokia's licensed under the entire portfolio. They have access to all the inventions. Again, not trying to predict what they can do or suggesting what they're allowed to do and not to do, it certainly would be a very significant task to take a look at that entire portfolio and attempt to (inaudible).

MICHAEL CROTTY (ph): Yes, of course. Yes. The other question I had is, to the extent that you were to negotiate a rate with Nokia that's less than the rate that you have previously negotiated with Ericsson and Sony Ericsson; would that potentially cause some ratcheting down in the royalty rates that Ericsson or Sony Ericsson are paying you or that any of your other licensees are paying?

UNIDENTIFIED PARTICIPANT: I can't get into the specifics of any agreements because that's obviously some -- some of it turns is whether contracts do or don't have lo-saver (ph) or licensee fee clauses and not all of our contracts do. And it depends upon that lo-saver (ph) licensee fee clause is structured whether they would get an entitlement to a lower rate in a future deal. But it -- it's a highly fact dependent type of thing and it's obviously something we are very aware of when we negotiate deals because, you know, the last thing you want to do is do a deal with one company that produces revenue but then has negative effect on a bunch of other deals.

So, it's one of the things that we live with every day here. The lo-saver (ph) licensee fee clause.