IMO:While the ICC Arbitral Panel has awarded IDCC "Interest" (7/1/05)and also a penalty if they fail to make the required PAYMENT (8/3/05)...TWO SEPARATE ISSUES..they can not set an actual Interest rate..But the U.S.D.C. can not only set the Interest rate, but also establish the monetary damage for failing to comply with the Binding Arbitration Award when it agrees with IDCC's Motion to enforce..Then and only then will Nokia be able to measure the COST and VALUE to them in stalling with a no-win Appeal.
InterDigital Receives Final Award in Arbitration Proceeding with Nokia Corporation
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--July 1, 2005--InterDigital Communications Corporation (Nasdaq:IDCC), a leading designer, developer and provider of wireless technology and product platforms, today announced that the Arbitral Tribunal operating under the auspices of the International Court of Arbitration of the International Chamber of Commerce (ICC) has delivered its Final Award in the arbitration proceeding between InterDigital Communications Corporation, InterDigital Technology Corporation (ITC), one of the company's wholly-owned subsidiaries, and Nokia Corporation (Nokia). The Tribunal has established royalty rates which are applicable to Nokia's sales of covered products for the period beginning January 1, 2002 through December 31, 2006 and reflect Nokia's leading market position. Based on the royalty rates established by the Tribunal, InterDigital estimates that Nokia's royalty obligations for covered infrastructure and handset sales from January 1, 2002 through December 31, 2003 will be approximately $112 million. In addition, InterDigital estimates that royalty obligations for covered infrastructure and handset sales for the period January 1, 2004 through December 31, 2006 will be in the range of $120 million to $140 million depending upon whether Nokia avails itself of a prepayment option for the eighteen month period from July 1, 2005 through December 31, 2006. The above amounts are exclusive of awarded interest, net of any applicable contractual discount and based on Nokia achieving sales volume that entitles Nokia to obtain the lowest applicable royalty rate. Estimates of post-2003 royalty obligations are based on third party and InterDigital's estimates of Nokia's sales of covered products for the applicable periods and InterDigital's assumptions as to market forecasts and Nokia's sales mix, selling prices and market share.
InterDigital to Oppose Nokia's Attempt to Vacate Binding Arbitration Final Award; Nokia Fails to Make Payment Required by ICC Final Award
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--Aug. 3, 2005--InterDigital Communications Corporation (Nasdaq:IDCC), a leading designer, developer and provider of wireless technology and product platforms, announced today that it will oppose Nokia's recent motion to vacate or modify the binding Final Award rendered by the International Court of Arbitration of the International Chamber of Commerce (ICC) in June 2005. Following two and one-half years of discussions, discovery, testimony, and deliberations in this matter, Nokia has alleged, among other claims, that the majority of the arbitration panel reached a "totally irrational result." Additionally, Nokia has continued its litigious approach toward resolving business issues with InterDigital by filing a new patent action in the United Kingdom last week. From the time Nokia was notified of its royalty obligations under its patent license agreement with the company, Nokia has filed eight separate legal actions involving InterDigital.
You make a very good point mschere. Why would the ICC set a "deadline" for Nokia's compliance with their rulings without also defining the consequences for non-compliance? Something along the lines of "Do what we say by this date, or else...(?)..". Seems like there would have to be an "or else" defined, but WHAT?
Had been assuming that legal expenses and interest on the amount due was all that Nokia was risking with their non-compliance, but it makes sense that the ICC's 45 day "deadline" would need to have some penalty provisions to back it up. Has me wondering what chance Nokia may have in getting the enforcement court to vacate, or to even modify, any of those ICC penalty provisions.
At the hearing on 12/2 the court wanted to know why Nokia was there and what legal basis there might be for vacating the ICC ruling. When Nokia did not have any meaningful answers for those questions, IMO it's not likely the court will be moved to cut them any slack on penalties.
The time for some serious settlement talks may be approaching.
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