Summary
InterDigital recently lost its appeal to revive patent infringement suits against Microsoft and ZTE, following a protracted dispute over mobile technology royalties. The US Court of Appeals for the Federal Circuit upheld the International Trade Commission's decision, finding no infringement on four patents and invalidating a fifth. As a result, InterDigital’s share price dropped, and the attempt to block phone sales was rejected. While Microsoft and ZTE expressed satisfaction with the ruling, InterDigital's CEO indicated intentions to continue pursuing related litigation. The company may seek further review of the Federal Circuit's decision.
InterDigital’s Appeal Dismissed by the Federal Circuit
The US Court of Appeals for the Federal Circuit (CAFC) dismissed InterDigital’s appeal to revive patent infringement suits against Microsoft and ZTE in early 2015. InterDigital, a patent licensing company, had alleged infringement of five mobile phone technology patents and had sought an order blocking the sale of phones using that technology. The International Trade Commission had previously ruled against InterDigital, and the Federal Circuit upheld that ruling, finding four of the five patents not infringed and declaring the fifth invalid.
Background to the Dispute
InterDigital had been in dispute with Nokia over royalties for more than seven years. When Microsoft acquired Nokia’s mobile device business, it inherited the litigation. ZTE’s phone unit, previously operating under the Nokia brand, was similarly drawn into the proceedings. The appeal sought to reverse the Commission’s findings and reinstate the request to block phone sales — a remedy the Federal Circuit also declined to grant.
Reactions and Next Steps
Microsoft’s spokesman David Cuddy stated that the company was pleased with the outcome. ZTE issued a statement confirming its satisfaction that the CAFC had found it not liable for infringement. InterDigital’s Chief Executive Officer William Merritt expressed disappointment but indicated the company would continue a separate litigation against Microsoft that had not yet commenced. He stated: “we remain very confident in the strength of our portfolio and in our ability to continue to grow our licensing program.” InterDigital’s share price declined 3.4 per cent to US$ 49.14 following the ruling.
Going forward, InterDigital had the option of seeking review before a three-judge Federal Circuit panel or before the full bench of patent-specialised judges at the court. In October of the preceding year, InterDigital had prevailed against ZTE in a separate suit concerning the same technology but different patents.
Disclaimer
This article is for general information and does not constitute legal advice. Readers should consult a qualified attorney before acting on any matter discussed here.