InterDigital Technology Corp. Reaches Royalty-Bearing Agreement with NEC Corp.

InterDigital Technology Corp. has inked a significant licensing agreement with NEC Corp., a major player in the wireless industry, covering the sales of products compliant with 3G and narrowband CDMA standards. Concomitantly, the companies resolved a long-standing patent dispute stemming from a 1995 license agreement. This mutually beneficial agreement will yield substantial revenue for InterDigital, marking a significant milestone in their pursuit of intellectual property rights.

Key Takeaways:

• InterDigital Technology Corp. has entered into a royalty-bearing license agreement with NEC Corp. for the sale of wireless products compliant with 3G and narrowband CDMA standards.
• The agreement includes infrastructure, terminal units, communication cards, and other mobile devices.
• NEC will pay InterDigital an advance royalty of $19.5 million, followed by recurring royalties as licensed products are sold.
• The settlement of the 2G TDMA license agreement dispute involves NEC's payment of $53 million to InterDigital, in addition to the previously paid royalty advance.
• This payment will be considered payment in full for NEC's royalty obligations for PHS and PDC products under the 1995 agreement.
• The 1995 agreement remains practically unaltered, except for the resolution of the dispute.
• NEC's current royalty payment obligations under the 1995 agreement are waived due to existing pre-paid units and specific provisions in the 1995 agreement.

Statistics:

• $19.5 million: Advance royalty paid by NEC to InterDigital for 3G products.
• $53 million: Payment made by NEC to InterDigital to settle the outstanding 2G TDMA license agreement dispute.
• 3G and narrowband CDMA standards: The licensed products will comply with these wireless standards.

Sources:

• InterDigital Technology Corp.
• NEC Corp.
• Original License agreement (1995)
• Agreement between InterDigital Technology Corp. and NEC Corp.