MORRISVILLE – Lenovo has been ordered to pay US patent holder InterDigital a $138.7 million lump sum to settle a years-long dispute over licensing.
The result was met with mixed reactions, as the sum was less than half of what InterDigital had originally hoped for.
John Mulgrew, VP and deputy general counsel at Lenovo, hailed it as “a major win for the technology industry and the customers we serve” that “underscores both the importance of fair, reasonable, and non-discriminatory terms for patent licensing and the requirement of transparency by patent holders engaged in licensing practices.” Mulgrew’s full statement is available on Lenovo’s website.
Lenovo likely views the nine-figure settlement as a win because InterDigital had been aiming for a $337 million settlement for a six-year license.
Since the two parties could not agree to a license agreement, presiding judge James Mellor instead determined a “FRAND” rate of $138.7 million.
(FRAND stands for “fair, reasonable, and non-discriminatory” and it’s described by Wikipedia as “a voluntary agreement between the standard-setting organization and the holder of standard–essential patents.”)
Because the patents in question are “essential” to 3G, 4G, and 5G communications communication as we know it, they’re subject to FRAND.
Journalist Amy Sandys of the European news platform JUVE Patent wrote that the decision “helps secure the UK’s reputation as a hub for global FRAND-rate setting.”
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Josh Schmidt, InterDigital’s Chief Legal Officer, celebrated the decision in a statement, calling it “the first major SEP FRAND judgment that recognizes that a licensee should pay in full,” but Schmidt also stated that InterDigital plans to appeal.
The ruling comes after an extensive legal dispute between both parties over what is deemed to be a fair payment for InterDigital’s patented technological innovations.
