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Title: |
Arbitration Settlement Agreement |
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Date: |
2006 |
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Preview shows 17KB of 50KB total |
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$45 |
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ID: |
#2285528 |
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CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Arbitration Settlement Agreement
By and between
InterDigital Communications Corporation,
InterDigital Technology Corporation
And
Nokia Corporation
Dated and Effective as of April 26, 2006
Page 1 of 17
InterDigital /Nokia Execution Copy (04-26-06)
Confidential & Proprietary
ARBITRATION SETTLEMENT AGREEMENT
This Settlement Agreement is entered into and effective as of April 26, 2006 by and between InterDigital Communications Corporation (IDCC), a Pennsylvania corporation with offices at 781 Third Avenue, King of Prussia PA 19406, and InterDigital Technology Corporation (ITC), a Delaware corporation having a mailing address of Suite 105, Hagley Building, 3411 Silverside Road, Concord Plaza, Wilmington, DE 19810, (individually and together, InterDigital), on the one hand, and Nokia Corporation (Nokia), a Finnish corporation with offices at Keilalahdentie 4, 02150 Espoo, Finland, on the other hand. (IDCC, ITC, and Nokia are sometimes referred to herein individually as a Party or together as the Parties).
BACKGROUND
| A. | InterDigital and Nokia are parties to three interrelated contracts relating to digital cellular technology, including the Nokia PLA, the TDD Development Agreement, and the Master Agreement. |
| B. | In 2003, a dispute arose between InterDigital and Nokia concerning Nokias royalty obligations for the sale of certain terminal unit and infrastructure products under the Nokia PLA. Pursuant to the terms of the Master Agreement and the Nokia PLA, the Parties submitted their dispute to Arbitration. In mid-2005, the Arbitral Tribunal issued its Award, in which it, among other things: (i) concluded that Nokias obligation under the Nokia PLA to pay royalties on certain Period 2 terminal unit and infrastructure sales had been triggered; and (ii) set forth the Period 1 and Period 2 royalty rates to be applied to Nokias sales of such certain terminal unit and infrastructure products under the Nokia PLA. |
| C. | In July 2005, InterDigital filed an action before the United States District Court for the Southern District of New York to confirm the Award. In December 2005, Judge William H. Pauley III issued the Order confirming the Award. In January 2006, Nokia filed a Notice of Appeal to the United States Court of Appeals for the Second Circuit. |
| D. | After the Tribunal issued the Award, a dispute between InterDigital and Nokia arose over, among other things, the calculation and scope of Nokias royalty base and resultant royalty obligation under the terms of the Award and the Nokia PLA. In December 2005, ITC sent Nokia a Notice of Dispute, initiating additional dispute resolution procedures. In January 2006, Nokia responded in correspondence, identifying additional issues in dispute. On March 30, 2006, InterDigital commenced an arbitration before the International Chamber of Commerce related to its December 2005 Notice of Dispute (the Second Arbitration). In addition, on March 24, 2006, ITC sent Nokia a Notice of Dispute initiating additional dispute resolution procedures related to Nokias purported breach of certain confidentiality obligations under the Master Agreement (the Confidentiality Dispute). |
| E. |
The Parties hereto desire to settle and resolve certain past, current and future disputes involving Nokias license under the InterDigital Patents for sales of 2G Covered Terminal Units, 2G Covered Infrastructure, and certain Excluded Products and payment of royalties |
Page 2 of 17
InterDigital /Nokia Execution Copy (04-26-06)
Confidential & Proprietary
|
on 2G Covered Terminal Units, 2G Covered Infrastructure, and certain Excluded Products, including, without limitation, disputes over the calculation of Nokias royalty obligation under the terms of the Award by, among other things, implementing the Award (including the rates set forth therein as to Nokia and its Affiliates), as follows. |
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the Parties agree as follows:
| 1. | DEFINITIONS. The terms set forth in Exhibit A, attached hereto and incorporated herein, when used with initial capital letters in this Agreement, shall have the meanings ascribed to them in Exhibit A for purposes of this Agreement. |
| 2. | DISMISSAL & CESSATION OF DISPUTES. In consideration of the Parties releases, acknowledgements, and agreements set forth herein, Nokia shall: (i) within 2 business days after obtaining confirmation by email from InterDigital that InterDigital has received the Settlement Fee1, cause its counsel to file a Notice of Withdrawal of Nokias Notice of Appeal of the Order; (ii) promptly take any other steps necessary to dismiss and terminate any appeal of the Order with prejudice; and (iii) refrain from taking any action to appeal, vacate or otherwise attack the validity of the Award or the Order. In addition, InterDigital shall, within 2 business days of receiving the Settlement Fee, submit a letter to the Secretariat of the ICC International Court of Arbitration requesting dismissal of the Second Arbitration with prejudice and thereafter take any and all other steps required to effect the dismissal of the Second Arbitration, and also withdraw without prejudice the Confidentiality Dispute. Each Party shall bear its own attorneys fees and costs, if any, incurred in connection with the Arbitration, the federal court proceeding that resulted in the Order, Nokias previous effort to appeal the Order, the Second Arbitration, and the Confidentiality Dispute. |
| 3. | RELEASES. |
| a. | InterDigital Release. |
(i) In consideration of the execution and delivery of this Agreement, effective and contingent upon InterDigitals receipt of the Settlement Fee in accordance with Section 5(a) herein, and subject to (3)(a)(ii) below, InterDigital Group irrevocably releases, acquits and forever discharges Nokia Group and its attorneys and agents from any and all Claims that InterDigital or its predecessors, successors, Affiliates and assigns ever had, now have or hereafter can, shall or may have, for, upon or by reason of Claims asserted or which could have been asserted against Nokia or its Affiliates (a) relating to Nokias or its Affiliates Protected Acts with respect to 2G Covered Terminal Units, 2G Covered Infrastructure and Additional Released Products sold by Nokia or its Affiliates, regardless of whether such Claims relate to an alleged infringement of the
| 1 |
Note to the reader-the Settlement Fee is equal to $252,000,000.00 |
Page 3 of 17
InterDigital /Nokia Execution Copy (04-26-06)
Confidential & Proprietary
InterDigital Patents or the rights and obligations created by the Nokia PLA, the Master Agreement, the TDD Development Agreement or the Award; (b) relating to Nokias payment obligations, including royalty reporting obligations, under the Award; (c) for any increase of, addition to, or premium of any kind charged against the Settlement Fee (except for interest, costs and attorneys fees that may become due under Section 5(c)), regardless of whether such Claim is pursued in a suit at law or equity, and regardless of the legal theory on which such Claim is pursued (e.g., Lanham Act, antitrust law, fraud, fraudulent inducement, or negligent misrepresentation, or contract law based on the Nokia PLA, Master Agreement or TDD Development Agreement or under the Award); (d) for any increase of, addition to, or premium of any kind charged against monies already paid for 2G Covered Terminal Units, 2G Covered Infrastructure, or Additional Released Products under the Master Agreement, Nokia PLA, or TDD Development Agreement, regardless of whether such Claim is pursued in a suit at law or equity, and regardless of the legal theory on which such Claim is pursued (e.g. Lanham Act, antitrust law, fraud, fraudulent inducement, or negligent misrepresentation, contract law based on the Nokia PLA, Master Agreement or TDD Development Agreement); or (e) for any rights relating to 2G Covered Terminal Units, 2G Covered Infrastructure, or Additional Released Products that are different from those acknowledged and agreed to herein, whether under the Award, Master Agreement, Nokia PLA, or application of the terms of the Ericsson PLA, Sony Ericsson PLA, Ericsson Side Letter, Sony Ericsson Side Letter, or the Lucent Agreement (as defined in Section 4(a) below).
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