Saturday, July 5, 2008

Nokia and InterDigital start to disassemble their running feud

You dream of seeing outcomes like this: One side asks the other, "What were we fighting about again?" The other side responds, "I don't remember." And the two shake hands and start picking up their mess. This may actually be happening.

It is perhaps the most bizarre patent licensing foray in the history of telecommunications -- so unusual that a third layer of lawsuits, filed beginning in July 2005 and extending into 2006, was literally convened to settle in court the question of what it was that the second layer of lawsuits was supposed to be about.

Specifically, could patent holding company InterDigital sue Nokia over whether it should sublicense certain 3G telecommunications patents to its own customers, if those patents were deemed to be unrelated to a series of other patents on which both sides thought they had already settled?

Yesterday, the question and its counter-questions became so confusing that both sides in the dispute literally said, to heck with it. In what may be the beginning of the most unlikely amicable end to an intellectual property dispute ever seen, InterDigital and the wireless technology manufacturer agreed to toss out their suit and countersuit in English High Court.

That unravels just one layer of a much deeper and still unresolved tangle, including litigation in a New York district court judge last March literally lost interest in adjudicating, ordering both sides to submit the matter before binding arbitration. At issue there remains the unbelievable matter of whether both sides actually settled their dispute in 2003; both sides apparently now believe they did not, but contend that differing issues were left unresolved.

The remaining questions in the US case, some of which were tossed out in the UK case, are these:

Are certain InterDigital patents that it claims are related to the 3G Universal Mobile Telecommunications System (UMTS) standard, actually relevant to that standard? InterDigital says yes, meaning that if Nokia sublicenses them, InterDigital should get a cut; and if Nokia uses them itself -- or more accurately, if it builds anything calling itself UMTS -- it should pay the agreed upon fee.

Are certain Nokia patents that it claims are related to UMTS actually relevant; and if Nokia licenses them to its customers as part of a UMTS intellectual property package, along with sublicensed InterDigital patents, then are Nokia's customers being charged unjustifiably high rates for technology they won't actually use? This was part of InterDigital's counterclaim, brought against Nokia in December 2006.

An InterDigital statement yesterday claims the details of this latest round of discussions, which resulted in this agreement, would be confidential to both sides. Perhaps it's best, this time around, if we don't ask too many more questions.

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