KING OF PRUSSIA, Pa.-Nokia Corp. has agreed to pay $253 million to InterDigital Communications Corp. to settle a long-running patent dispute between the companies, according to InterDigital.
InterDigital’s stock soared more than 20 percent on the news to around $27.01 per share. Nokia’s stock remained relatively unchanged in trading.
The dispute grew out of a 1999 patent-licensing and development agreement between the two companies that called for Nokia to pay $31.5 million up front to InterDigital to cover sales through the end of 2001. The companies agreed royalties owed after 2001 would be based on agreements InterDigital subsequently signed with Nokia’s competitors.
In 2003, InterDigital signed licensing agreements with L.M. Ericsson and Sony Ericsson Mobile Communications L.P. and told Nokia it would be subject to the same licensing terms as Ericsson and Sony Ericsson. Nokia disagreed and took the issue to an arbitral tribunal. The tribunal sided with InterDigital. InterDigital’s position was further solidified late last year when a U.S. court confirmed a ruling that called for Nokia to pay InterDigital $250 million in the dispute.
InterDigital said once Nokia pays the settlement, it will be paid up for sales of its second-generation products. The companies also agreed to end their 1999 third-generation patent license, which was scheduled to run through this year. InterDigital said it released Nokia from infringement liability for sales of its 3G products through the date of the settlement and that 3G products sold by Nokia after that date will be unlicensed.
Both companies agreed to withdraw legal claims filed in U.S. and international courts related to the case, said InterDigital.
InterDigital last year settled a patent dispute with Lucent Technologies Inc., but remains embroiled in another patent dispute with Samsung Electronics Co. Ltd.
