Judge Confirms Award For Interdigital In Nokia Dispute

NEW YORK -(Dow Jones)- A federal judge in Manhattan on Wednesday confirmed an arbitration award of about $250 million for InterDigital Communications in a dispute with cellular phone maker Nokia over royalties.

In an order filed Wednesday in the Southern District of New York, U.S. District Judge William H. Pauley III upheld the award granted by an arbitration panel in June and denied Nokia's motion to vacate it.

"While this court does not necessarily agree with every finding of the panel, there is nothing so aberrant about the award to require vacatur," Judge Pauley said in his order. "This court confirms the award in its entirety."

The dispute revolves around royalties agreed to as part of licensing agreements entered into by InterDigital Communications and Nokia in January 1999.

A Nokia spokesman didn't immediately have a comment when reached Wednesday afternoon.

Under the agreements, Nokia paid InterDigital $31.5 million in royalties for all handset sales using InterDigital technology prior to January 2002, according to the judge's order.

Nokia's royalty obligations for sales between January 2002 and December 2006 would then be contingent on InterDigital entering into licensing agreements with one of Nokia's three "major competitors" - Lucent Technologies Inc. (LU), Telefon AB L.M. Ericsson (ERICY) or Motorola Inc. (MOT), according to the order.

In March 2003, InterDigital entered into two patent licensing agreements with Ericsson and Sony Ericsson Mobile Communications - a joint venture between Sony Corp. (SNE) and Ericsson. In creating the joint venture, Ericsson sold its handset business to Sony Ericsson for cash consideration, according to the judge's order.

After entering into the Ericsson agreements, InterDigital requested about $500 million in royalty payments from Nokia, which disputed the obligations and invoked its right to arbitration, according to the order.

In a filing with the Securities and Exchange Commission on Tuesday, InterDigital said has taken action to utilize the dispute resolution process under its licensing agreement with Nokia in order to compel Nokia to abide by the arbitration panel's ruling.

The dispute resolution process would establish a timetable for discussions, senior representative meetings and any future initiation of arbitration, if necessary, according to the filing.

-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 28th December 2005