Media Contact:
Susan Sutton
e-mail: susan.sutton@interdigital.com
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Investor Contact:
Janet Point
e-mail: janet.point@interdigital.com
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(610) 878-7800
FOR IMMEDIATE RELEASE
January 16, 2002
INTERDIGITAL AND NEC SIGN GLOBAL 3G PATENT LICENSE AGREEMENT
AND SETTLE OUTSTANDING 2G PATENT LICENSING DISPUTE
King of Prussia, PA, January 16, 2002 . . . InterDigital Communications
Corporation (NASDAQ: IDCC), a leading developer and enabler of advanced wireless
technologies and product platforms, today announced that its subsidiary,
InterDigital Technology Corporation (ITC), has entered into a royalty-bearing
license agreement with NEC Corporation of Japan for sales of wireless products
compliant with all Third Generation (3G) and narrowband CDMA standards. The
Company concurrently reached an amicable settlement of its Second Generation
(2G) patent licensing dispute with NEC in connection with a 1995 license
agreement.
Under the 3G agreement, ITC will receive a royalty on each licensed
product sold by NEC. The licensed products include infrastructure, terminal
units, communication cards and other mobile devices compliant with Third
Generation and narrowband CDMA standards. NEC will pay ITC an advance royalty of
$19.5 million. Once that advance is exhausted, NEC will be obligated to pay
additional recurring royalties to ITC as it sells licensed products. In
addition, NEC and ITC agreed to settle the outstanding 1995 2G TDMA license
agreement dispute for the payment by NEC of $53 million to ITC. The $53 million
is in addition to the royalty advance previously paid by NEC under the 1995
agreement. In exchange for those payments, NEC's royalty obligations for PHS and
PDC products under the 1995 agreement will be considered paid up. Otherwise, the
1995 agreement will remain materially unaltered by the settlement. Currently,
NEC has no further royalty payment obligations under that agreement based on
existing pre-paid units and certain other unique provisions included in the 1995
agreement.
"We are very pleased to welcome NEC as an ITC 3G patent licensee, while
also reaching an amicable resolution of the outstanding patent dispute between
us," said Howard Goldberg, President and Chief Executive Officer of
InterDigital. "NEC is a key global supplier of telecommunications equipment
worldwide, and the number one supplier of 3G telecommunications products in
Japan, the country which is leading the world in 3G rollout. This licensing
agreement with NEC, combined with our previous 3G agreements with Sharp,
Matsushita, and Japan Radio Company demonstrates the strength of ITC's expanding
3G patent portfolio. Our broad portfolio of essential patents, along with
InterDigital's 3G products and technology, will serve to fuel the Company's
revenue growth as the 3G market emerges."
"The 3G patent licensing program at ITC continues to gain momentum,"
added William J. Merritt, President of ITC. "We have executed four 3G license
agreements in the last ten months, including agreements with the top two
manufacturers in Japan. We anticipate continued success in 2002, as additional
companies come to recognize the breadth and scope of ITC's 3G related inventions
realized over 15 years of research and development. We are well positioned to
leverage these key 3G license agreements as other global markets emerge."
-more-
Given the complexity of accounting for revenue associated with
multi-faceted agreements, the Company and its auditors have not finalized the
manner in which revenue will be recognized for payments to be received under
these agreements.
About NEC Corporation
NEC Corporation (NASDAQ: NIPNY) (FTSE: 6701q.l) is a leading provider of
Internet solutions, dedicated to meeting the specialized needs of its customers
in the key computer, network and electron device fields through its three
market-focused in-house companies: NEC Solutions, NEC Networks and NEC Electron
Devices. NEC Corporation, with its in-house companies, employs more than 150,000
people worldwide and saw net sales of 5,409 billion Yen (approx. US$43 billion)
in fiscal year 2000-2001. For further information, please visit the NEC home
page at: http://www.nec.com.
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NEC is a trademark of NEC Corporation.
About InterDigital Communications Corporation
InterDigital develops advanced wireless technologies and products that
drive voice and data communications. The Company offers technology and product
solutions for mainstream wireless applications that deliver cost and
time-to-market advantages for its customers. InterDigital has a strong portfolio
of patented TDMA, GSM/GPRS and CDMA inventions, which it licenses worldwide. For
more information, please visit InterDigital's web site: www.interdigital.com.
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InterDigital is a trademark of InterDigital Communications Corporation.
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This press release contains forward-looking statements regarding, among other
things, the continued success in our patent licensing program, our ability to
leverage existing agreements, and the growth in ITC's 3G related patent license
revenue. Such statements are subject to risks and uncertainties. Actual outcomes
could materially differ from those expressed in any such forward-looking
statements due to a variety of factors. These factors include, but are not
limited to ITC's ability to obtain and maintain key patents worldwide, inability
to conclude licensing agreements upon mutually acceptable terms, failure of
licensees to meet sales expectations, and the failure of the 3G market to
materialize at all or at the rate or pace that we expect, as well as other
factors listed in the Company's most recently filed 10-K Annual Report.
InterDigital undertakes no duty to publicly update any forward-looking
statements, whether as a result of new information, future events or otherwise.