InterDigital, Inc.

InterDigital, Inc., together with several subsidiaries, has filed suit against Disney (BAMTech, ESPN, Hulu) (2:25-cv-00895) in the Central District of California. Targeted with six patents is the provision of the defendants’ various video streaming services—including Disney+, ESPN+, Hulu, and Hulu Live. At issue is the support for the H.264 (AVC) and H.265 (HEVC) video compression standards, Dolby Vision technology, and “Skip Intro” features.

Litigation over standard essential patents (SEPs) typically involves a variety of interrelated issues, including questions over whether the parties have acted as willing licensors/licensees, the essentiality of the asserted patents, infringement, and validity. Recently, though, the US federal court leg of one prominent, multijurisdictional SEP dispute took a relatively atypical detour into US state law. On August 13, Eastern District of North Carolina Magistrate Judge Robert T. Numbers, II resolved a discovery dispute partly in favor of defendant Lenovo in support of its counterclaim brought under the state’s bad-faith patent assertion law against SEP owner and plaintiff InterDigital, Inc. While the court declined to compel the production of licensing offers made to others (ruling that this information was beyond the scope of the statute), it granted Lenovo’s request to compel production of “demands” (communications alleging infringement, as broadly defined by the statute) sent to others.

Recently recorded patent assignments made public by the USPTO contain noteworthy transfers to multiple plaintiffs now in litigation, including a new source of patents for Apex Beam Technologies LLC, a new source of patents for Pantech Corporation, and a familiar source of patent rights for Crystal Leap Zrt, this time assigning patents directly, though. Movement can also be seen from troubled patent monetization firm IP Edge LLC, as well as movement from various sources to patent broker Allied Security Trust. Take a look.

An Eastern District of North Carolina complaint from InterDigital, Inc. against Lenovo (Motorola Mobility) (5:23-cv-00493) was filed in tandem with a complaint filed before the International Trade Commission (ITC) (337-TA-3692) over the same five patents. Via both actions, InterDigital targets the provision of smartphones, computers (desktops and laptops), and tablets that allegedly support wireless file sharing and/or the AOMedia Video 1 (AV1) and VP9 video codecs. InterDigital pleads a domestic industry (either established or in process) through the US activities of licensees Apple and VIZIO.

Last month, Eastern District of Pennsylvania Judge Joshua D. Wolson, sitting in Delaware by designation, granted Lenovo’s request to stay a patent case that InterDigital, Inc. filed against it back in 2019 and that had been headed to an early December 2023 trial. The court did so to await an appeal of a March 2023 judgment from the London High Court of Justice in InterDigital v. Lenovo, that decision imposing a $138.7M global fair, reasonable, and nondiscriminatory (FRAND) license against defendant Lenovo after finding that neither party’s offers had been FRAND in their dispute over patents declared essential to various 3G, 4G, and 5G cellular standards. Now, InterDigital (together with various subsidiaries) has accused Lenovo (Motorola Mobility) (5:23-cv-00493) in a new Eastern District of North Carolina complaint of infringing five patents through the provision of smartphones, computers, and tablets that allegedly support wireless file sharing and/or the AOMedia Video 1 (AV1) and VP9 video codecs.

On March 16, the London High Court of Justice released its long-awaited judgment in InterDigital v. Lenovo, imposing a $138.7M global fair, reasonable, and nondiscriminatory (FRAND) license against defendant Lenovo after finding that neither party’s offers had been FRAND. The rate was closer to what Lenovo had sought (totaling $80M) than US-based InterDigital, Inc.’s proposal ($337M). Notably, the court also found that Lenovo had behaved as a willing licensee during licensing negotiations, but that InterDigital had not acted as a willing licensor due having consistently offered supra-FRAND rates. The court also rejected InterDigital’s proposed rate-setting methodology. This sweeping, 225-page decision marks the second time that a UK court has issued a FRAND determination in a standard essential patent (SEP) dispute.

u-blox (3:23-cv-00002) has filed suit against InterDigital, Inc. again, after the apparent expiration of a license that ended the parties’ 2019 litigation. In its new, partially redacted complaint, u-blox represents that it remains willing to enter into a license under fair, reasonable, and nondiscriminatory (FRAND) terms, “adjusting for patent expiration dates”, but that InterDigital now refuses to negotiate such a license to its standard essential patents (SEPs) in good faith. The case has again been filed in the Southern District of California.

InterDigital, Inc. (IDCC) released its third quarter earnings on November 4, reporting a 64% increase in revenue compared to Q3 2020 and a string of new licensing agreements, including with a global TV manufacturer. In an earnings call with investors, CFO Rich Brezski touted Q3 2021 as IDCC’s “strongest quarter in almost four years”.

In early August, InterDigital, Inc. and Quarterhill Inc. released second quarter financial results providing glimpses into each company’s Q2 licensing activities as well as updates on their respective litigation campaigns.

USPTO records reflect recent movement of a portfolio of over 100 US patent assets from Signal Trust for Wireless Innovation—formed in 2013 by InterDigital, Inc. to “monetize a patent portfolio primarily related to 3G cellular infrastructure”—to a Texas NPE that appears to be tied to Glocom, Inc.

Lenovo (Motorola Mobility) has opened up another front in the set of disputes with InterDigital, Inc. (IDCC), pleading restraint of trade and monopolization claims under both Sections 1 and 2 of the Sherman Act, as well as of breach of contract, in a new District of Delaware complaint (1:20-cv-00493). Last August, IDCC sued Lenovo in the United Kingdom, alleging infringement of four UK patents, each of which the plaintiff characterizes as essential to either 3G or 4G standards; one day later, IDCC sued Lenovo in the District of Delaware, alleging infringement by cellular-enabled Motorola and Lenovo devices practicing certain standards (e.g., HSUPA, LTE, and WCDMA) of eight US wireless communications patents. In the US case, Lenovo has challenged six of the patents in an Alice motion that remains pending before District Judge Leonard P. Stark.

This month, Lenovo (Motorola Mobility) renewed an Alice motion attacking six of the eight wireless communications patents that InterDigital, Inc. (IDCC), through a group of subsidiaries, has asserted in its sole active US case. The defendants’ accused products are cellular-enabled Motorola and Lenovo devices practicing certain standards (e.g., HSUPA, LTE, and WCDMA). The abstract ideas to which the current motion alleges IDCC’s claims are patent-ineligibly directed range from “requesting additional bandwidth when the previously allocated bandwidth is insufficient” to “transmitting channel quality measurements in a rotating pattern of time intervals”. The challenge comes as InterDigital has published information detailing its “handset rate structure, portfolio data, [and] licensing principles” as part of a “new phase of transparency”.

InterDigital, Inc.’s (IDCC’s) third quarter earnings call on October 31 provided an update on the company’s efforts to gain a greater foothold in China—for which its recent deal with ZTE bodes well, according to CEO William Merritt (who added that the deal with ZTE, which will reportedly resolve all pending legal proceedings between the two companies, “also sets a solid foreign benchmark for current and future litigations”). IDCC’s executives also lauded the company’s entry into a license agreement with Google, inked through “a patent licensing platform that involved a number of licensors”.

Recent months have seen the Internet of Things (IoT) licensing platform Avanci, LLC announce license agreements with multiple automotive OEMs, including Audi, Porsche, and Volkswagen, to its portfolio of standard essential patents (SEPs) covering cellular technologies. However, despite Avanci’s traction with those OEMs, the company has now begun to see pushback at the supplier level. On May 10, automotive component supplier Continental filed a declaratory judgment (DJ) complaint in the Northern District of California against Avanci and several of the patent owners participating in its licensing program, alleging that by refusing to offer fair, reasonable, and non-discriminatory (FRAND) licenses to suppliers, they have committed various antitrust violations and breached their contractual FRAND obligations, further seeking equitable relief (5:19-cv-02520). The dispute echoes similar licensing battles that continue to play out in European courts, including litigation involving patent owners Nokia and Broadcom, respectively, and OEM Daimler—which does not appear to have a relationship with Avanci—filed in German courts and before the European Commission. Similar antitrust claims have also been raised in a US DJ action recently filed by u-blox against InterDigital, Inc., which has since seen filings from the US government that reflect a recent shift in antitrust enforcement policy.

Publicly traded InterDigital, Inc. has been hit with an international salvo of complaints over the NPE’s alleged breach of its fair, reasonable, and non-discriminatory (FRAND) licensing obligations as to certain standard essential patents (SEPs) covering cellular technologies. In California, Swiss semiconductor firm u-blox has sued InterDigital for allegedly insisting on unfair and discriminatory licensing terms for certain 2G, 3G, and 4G patents while using abusive tactics to force it to take a license, including inappropriate communications with its customers and downstream manufacturers. The plaintiff has asked the court to determine a FRAND licensing rate, enjoin InterDigital from making further contact with its clients, and to issue a declaration of noninfringement for certain wireless communications products, including cellular modules implementing the LTE standard. Meanwhile, InterDigital disclosed on January 7 that it was just sued in China by Huawei, which has alleged that the NPE has violated its FRAND obligations as to certain patents related to 3G, 4G, and 5G standards. Huawei has purportedly asked the court to determine the proper licensing rate for certain wireless products following the expiration of a license at the end of 2018.

InterDigital, Inc.’s third quarter earnings call on November 1 included an update on the company’s integration of Technicolor’s patent licensing business. It also revealed InterDigital’s potential plans for expansion in China.

Following InterDigital, Inc.’s announcement last month of its acquisition of Technicolor’s patent licensing business—a deal the company says will “extend its licensing program to new activities in the consumer electronics field”—assignments received from LG Electronics, and most recently, Huawei, were recorded with the USPTO. April has also seen another transfer from NXP Semiconductor to an affiliate of Fortress Investment Group LLC; transfers of more than 100 US patent assets from NXP to Fortress have been recorded to date.

The Patent Trial and Appeal Board (PTAB) saw activity in a variety of notable campaigns throughout February 2018, with petitions for inter partes review (IPR) filed against publicly traded Quarterhill Inc. as well as Fundamental Innovation Systems International LLC, Intellectual Ventures LLC, Realtime Data LLC, and Uniloc Corporation Pty. Limited. The Board also instituted trial in February for IPRs against General Patent Corporation, Oyster Optics, LLC, and Uniloc. In addition, the PTAB issued final decisions throughout February in IPRs against a range of different patent owners, including publicly traded NPEs (Acacia Research Corporation; InterDigital, Inc.; and VirnetX Inc.), an individual inventor (Daniel L. Flamm), and privately held plaintiffs (ChanBond, LLC; Makor Issues & Rights Ltd.; Papst Licensing GmbH & Company Kg; and Personalized Media Communications, LLC).

The Federal Circuit has affirmed a Delaware jury’s October 2014 infringement verdict for InterDigital, Inc. in the NPE’s case against ZTE (1:13-cv-00009). In a decision issued on November 3, the court upheld District Judge Richard G. Andrews’s post-trial ruling that the jury’s finding of infringement as to three wireless communications patents had been properly supported by the evidence, also affirming Judge Andrews’s construction of a key claim term (2016-2362). That verdict issued in the first of two trials in the same lawsuit, the second of which culminated in a finding of noninfringement for ZTE as to a fourth patent in April 2015.

Dominion Harbor Enterprises, LLC (DHE), an affiliate of patent monetization firm Dominion Harbor Group, LLC (DHG), has formed a new European licensing partnership with Swedish IP brokerage and consulting firm Parallel North IP AB. In a press release issued on May 3, DHE announced that it will work with Parallel North IP to monetize the portfolio of former Kodak imaging patents that DHG subsidiary Monument Peak Ventures, LLC acquired from Intellectual Ventures LLC (IV) in February. DHE describes the deal with Parallel North IP as part of a “comprehensive global plan to commercialize” the Kodak portfolio.

For the fourth quarter of 2016, InterDigital, Inc. has reported that its revenue more than doubled over the same period last year due to the signing of a key license agreement with Huawei, with net income more than four times higher than in Q4 2015. However, Tessera Holding Corporation recorded a loss for the fourth quarter of this year, citing costs related to its acquisition of DTS Corporation in December. In contrast with InterDigital, Tessera has increasingly sought to characterize itself as a product licensing company, announcing the day before its earnings report that it has rebranded itself as Xperi Corporation.

During the second half of October 2016, RPX took note of eight patent transfers to NPEs. Assignees included two NPEs controlled by Monument Patent Holdings, LLC; a new NPE managed by IP Valuation Partners LLC; and an NPE with apparent ties to Nicolas J. Labbit. Several of the transacted patents have been asserted in litigation filed over the past month.

In the second half of June 2016, RPX saw over 20 patent transfers to NPEs recorded with the USPTO. A number of those transactions involved patents that have been asserted in litigation against operating companies—some as recently as this past week.

In the second half of March 2016, RPX saw twelve patent transfers to known NPEs recorded with the USPTO. Several of those transactions involved patents that have already been asserted in litigation against operating companies.

The second trial stemming from InterDigital’s 2013 infringement suit against ZTE wrapped up last week with a judgment in favor of the device maker (1:13cv00009). Following several hours of deliberation, an eight-person Delaware jury found that ZTE’s accused smartphones do not infringe a patent related to a wireless communication system (7,941,151). Nor has ZTE induced others to infringe any of the asserted claims of the patent (claims 2, 4, 5, and 6), according to the jury’s verdict.

InterDigital (IDCC) announced financial results for the third quarter of 2014. Revenue totaled $77.6M, down from $110.6M in the same quarter last year. IDCC disclosed that Q3 2014 revenue was inclusive of $64.1M in past-sales revenue resulting from an arbitration award and past shipments by a licensee. Companies that individually accounted for ten percent or more of revenue in the third quarter were Samsung at 22% ($17.0M), Pegatron at 20% ($15.5M), and Sony at 13% ($10.0M).

InterDigital (IDCC) released financial results and its 10-Q filing for the second quarter of 2014. Revenue in Q2 totaled $194.2M compared to $67.7M in the same quarter last year. IDCC primarily attributes this 187% increase to patent license agreements signed in Q2, which resulted in higher past patent royalties and current patent royalties. The NPE recognized royalties from over 25 licensees in the second quarter and signed three new patent license agreements: one with Samsung, covering 3G and 4G wireless products, which resolved all pending litigation between the entities; and two additional license agreements covering infrastructure equipment products and terminal units. IDCC issued a press release on April 7 announcing that one of its subsidiaries entered into patent license agreement with Fujitsu, covering “2G, 3G, and 4G terminal unit and infrastructure equipment products, including LTE and LTE-advanced products.” Companies that individually accounted for ten percent or more of second-quarter revenue were Samsung at 53% ($102.9M) and Ericsson at 11% ($21.3M).

Last week InterDigital(IDCC) released financial results for the first quarter of 2014. IDCC reported Q1 revenue of $57.8 million compared to $47.3 million in the same period last year. This 22% increase was attributed to $3.1 million in royalties as a result of a 2013 Intel arbitration award and a $7.2 million boost in patent royalties related to IDCC’s 2013 license agreement with Pegatron. According to IDCC, Pegatron accounted for 31% of first-quarter revenue. Sony was the only other company that accounted for more than 10% of revenue, at 17%. While net loss was down at $1.9M, compared to a net loss of $12.3 million in the first quarter of last year, the momentum IDCC reported in 2013 continues to slow down: Trailing four-quarter revenue for Q1 2014 totals $335.8 million, down 48% from $641.1 million in Q1 2013. The entity ended the first quarter of 2014 with $684.6 million in cash and short-term investments.

This week InterDigital (IDCC) released financial results for the fourth quarter of 2013. While Q4 revenue is up from $87.9 million in 2012 to $99.7 million in 2013, the entity’s full-year revenue is less than half of what it was in 2012. IDCC’s total revenue in 2012 was $663.1 million compared to $325.4 million in 2013, a result IDCC attributes in part to a $384 million decrease in patent sales. Increased Q4 revenue was reportedly driven by past patent royalties, per-unit royalties, and technology solutions revenue, all of which were boosted by awards received in arbitration with Pegatron and Apple. IDCC disclosed that Pegatron accounted for 57% of total Q4 2013 revenue at $56.9 million, of which $35.6 million was past patent royalties.

This year’s third quarter produced less financial success for a number of NPEs compared to previous years and InterDigital is no exception. The entity reported a less profitable quarter in Q3 2013 than it had at the same time in the previous year. Overall revenue for the quarter was reported at $111 million while in Q3 of 2012 it was $434 million. InterDigital also disclosed that 49% of that revenue came from a single source, Intel Mobile Communications. Net income was down significantly this quarter, $26 million compared to $236 million during the same quarter in 2012. That was also reflected in InterDigital’s year-to-date income. For the first nine months of the year, it reported income of $22 million, down from $256 million in the first nine months of 2012.

July 31, 2012 – InterDigital announced that it has entered into a patent license agreement with Wistron that covers handsets, wireless modules, computers, tablets, and other consumer electronics devices that operate in accordance with 2G, 3G, and 4G wireless standards.

June 18, 2012 – InterDigital announced the sale of approximately 1,700 patents purportedly related to 3G, LTE, and 802.11 technologies to Intel for $375 million.

May 9, 2012 – InterDigital announced that its Q2 2012 revenue will be approximately $71 million, a number that will includes royalties as well as revenue from the expected sale of four patent families.

April 25, 2012 – The Financial Times reports that InterDigital has split its patent portfolio into separate sub-portfolios to for potential sale to multiple buyers.

April 9, 2012 – InterDigital announced that its patent holding subsidiaries amended their license agreements with Acer and Pantech to now include patent coverage for tablets.  The original license agreements when signed in 2009 (Pantech) and 2011 (Acer) reportedly covered 2G, 3G, and 4G technologies.