Exhibit 99.1
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.
"In 1999, InterDigital entered into the original agreement with
Nokia in good faith," commented William J. Merritt, President and
Chief Executive Officer of InterDigital. "Over the course of the past
several years, InterDigital has systematically honored the agreement
and when this dispute arose, we pursued resolution in a controlled
manner with the sole objective of finding a sensible business outcome.
Nokia has taken a different approach and has not complied with the
terms of the Final Award, including missing the deadline set forth in
the Final Award for payment of royalties for past sales. We are very
confident that Nokia will fail in its efforts to have the Final Award
vacated or modified and will pay the amounts due, either of their own
accord or by court order."
Mr. Merritt, further noted, "Nokia's public statements about the
arbitration and the Final Award are misleading. The arbitration
process was measured and rigorous, affording both parties ample
opportunity to present their respective positions. The majority,
comprised of seasoned commercial litigators/arbitrators, wrote a
comprehensive and well-reasoned decision addressing the relevant
issues. The dissenting opinion, authored by the arbitrator selected by
Nokia, has no legal effect on the enforceability of the Final Award."
"Based on these facts, and the very limited basis available under
the law for a court to vacate or modify a binding arbitration
decision, InterDigital believes that any challenges to the Final Award
are frivolous," added Mr. Merritt. "Moreover, the purpose of parties
selecting binding arbitration is to achieve finality in business
disputes, and to do so in an expedited manner. Consistent with that
purpose, any court proceeding to challenge a binding arbitration award
is normally undertaken on a summary basis (i.e., no new trial is
held), making the review process more streamlined and expedited than
traditional U. S. District Court litigation."
In July 2003, Nokia filed a request with the ICC for binding
arbitration regarding Nokia's royalty payment obligations for its
worldwide sales of 2G and 2.5G products under the existing patent
license agreement with InterDigital. On July 1, 2005, InterDigital
announced the material findings made by the Arbitral Tribunal
operating under the auspices of the ICC. In sum, two of the three
arbitrators favored all but one of InterDigital's positions on the
interpretation of the rate-setting provisions in the patent license
agreement between Nokia and InterDigital. Under the binding Final
Award, 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 also established dates for
payment of royalties on past sales.
On July 1, 2005, InterDigital initiated an enforcement action in
the U. S. District Court for the Southern District of New York in
order to convert the Final Award into a court judgment which would
allow InterDigital, if necessary, to compel collection of the
royalties due to InterDigital from Nokia under the Final Award.
Collection ultimately could be compelled through a number of different
judicial processes.
In a separate action on July 29, 2005, Nokia filed a claim in the
United Kingdom High Court of Justice, Chancery Division, Patents Court
against InterDigital Technology Corporation (ITC), a wholly-owned
subsidiary of InterDigital Communications Corporation. Nokia's claim
seeks a Declaration that the importation, manufacture and sale of
mobile phones and/or infrastructure equipment compliant with the 3GPP
Standard TS 41.101 Release 5 without license from ITC does not require
infringement of any of thirty-one of ITC's UMTS European Patents
registered in the UK, such that none of the patents are essential IPR
for that standard. InterDigital believes the filing is without merit
and intends to vigorously defend its position.
Note to editors:
In February 1999, Nokia entered into agreements with InterDigital
which covered both technology development and a patent license
agreement. As part of the patent license agreement, Nokia paid $31.5
million up front to InterDigital to cover product sales through the
end of 2001. Royalties owed after 2001 could be defined through direct
negotiation, or by a patent license agreement with a designated major
competitor, typically referred to as a Most Favored Licensee clause, a
customary licensing term in the industry. Patent licensing agreements
signed in March 2003 between InterDigital and Ericsson and Sony
Ericsson established the framework for Nokia's royalty obligations for
2G and 2.5G handset and infrastructure sales. After these patent
licensing agreements were signed, InterDigital notified Nokia of its
royalty payment obligations. Nokia disagreed with InterDigital's
interpretation of the impact of these patent licensing agreements and
requested binding arbitration in July 2003 to resolve the dispute.
About InterDigital
InterDigital designs, develops and provides advanced wireless
technologies and products that drive voice and data communications.
The company offers technology and product solutions for wireless
applications that deliver time-to-market, performance and cost
benefits, as well as product differentiation advantages to its
commercial and government/military customers. InterDigital has a
strong portfolio of patented technologies covering 2G, 2.5G, 3G and
802 standards, which it licenses worldwide. For more information,
please visit InterDigital's web site: www.interdigital.com.
InterDigital is a registered trademark of InterDigital Communications
Corporation.
This press release contains forward-looking statements regarding
our current beliefs and expectations as to our plans to oppose Nokia's
attempt to vacate or modify the Final Award, the likelihood of success
and character of Nokia's challenges to the award and Nokia's payment
of the amount due, and our plans to vigorously defend our position in
the UK Patents Court. Words such as "intends", "could", "should" or
similar expressions are intended to identify such forward-looking
statements.
Forward-looking statements are subject to risks and uncertainties,
and actual outcomes could differ materially from those expressed in or
anticipated by such forward-looking statements due to a variety of
factors including, without limitation, a decision by the U.S. District
Court to grant Nokia's motion, in whole or in part, or an agreement by
the parties to resolve issues upon terms other than those set forth in
the award, unanticipated costs of defense, a decision by the UK
patents court to grant the requested declaration in whole or in part.
InterDigital undertakes no duty to update any forward-looking
statements, whether as a result of new information, future events or
otherwise.
CONTACT: InterDigital Communications Corporation
Media Contact:
Dawn Goldstein, 610-878-7800
dawn.goldstein@interdigital.com
or
Investor Contact:
Janet Point, 610-878-7800
janet.point@interdigital.com