Context: In late 2021, InterDigital sued OPPO and OnePlus over standard-essential patents (SEPs). In Germany, InterDigital obtained an injunction, but at a time when OPPO was not selling products in Germany as they left the market in response to a couple of court wins by Nokia. Panasonic would have faced the same problem of a German injunction not making a difference to OPPO at the relevant time, but also sued in the Unified Patent Court (UPC) and the UK — and that dispute was settled last week (October 25, 2024 ip fray article).
What’s new: Today, InterDigital announced a license agreement with the OPPO corporate group and the withdrawal of all pending lawsuits between the two parties (October 29, 2024 InterDigital press release).
Direct impact: InterDigital touts the progress it is making with its licensing program. With Lenovo, InterDigital is not yet at the stage of a license agreement, but getting there reliably through binding arbitration that settled all lawsuits (October 9, 2024 ip fray article). What remains to be seen now is whether OPPO, which also settled with Philips (August 8, 2024 ip fray article) and Nokia (January 24, 2024 ip fray article), and avoided litigation with Ericsson in the first place (July 15, 2024 ip fray article), will return to the German market, provided that an agreement is struck with VoiceAge EVS as well. Some resellers may be more welcoming than others. Major carriers like Deutsche Telekom generally disfavor discontinuity as they also invest in the brand recognition of their partners. The precedent of shutting down its operations may also complicate efforts to hire local management.
Wider ramifications: At the moment, the most significant pending disputes over wireless SEPs are ZTE v. Lenovo (October 27, 2024 ip fray article), Ericsson v. Lenovo (October 24, 2024 ip fray article), Nokia v. Amazon (September 20, 2024 ip fray article) and Huawei v. Netgear (August 21, 2024 ip fray article). Tomorrow, the UPC’s Munich Local Division will hear a Huawei v. Netgear case.
Today’s press release says the following about the coverage of InterDigital’s cellular SEP licensing program:
“Along with our agreements with Apple, Samsung and Xiaomi, InterDigital now has the four largest smartphone vendors under license and has licensed approximately 70% of the entire global market.”
There are some major players that mostly sell products in price-sensitive markets, which to some extent applies to OPPO, but even more so to the likes of vivo (which often takes a license shortly after OPPO settles disputes with a given company) and Transsion (whose most important market is Africa, where it is the undisputed leader). It will be interesting to see what cellular SEP implementer is next to be sued by InterDigital, now that they have freed up some litigation resources.
Last month, InterDigital announced a $1 billion target for its annual recurring revenue by the year 2030 (September 16, 2024 InterDigital press release). The terms of the OPPO license agreement are not publicly known, and the ones between InterDigital and Lenovo have yet to be determined. InterDigital’s revenue goal will depend in no small part on the regulatory environment. So far, InterDigital has been able to avoid litigation, even if this required major discounts to the largest players in the market. Some licensees, however, believe that InterDigital’s royalty rate is too high compared to the objective value of its portfolio. The license fees charged by Nokia and Ericsson are considered a much better deal for implementers than InterDigital’s rates.
The next major InterDigital license agreement to be up for renewal is presumably the one with Xiaomi. And Xiaomi has just demonstrated in its dispute with Panasonic that it will defend vigorously in certain situations. Whenever InterDigital and Xiaomi discuss a renewal of their license agreement, the outcome of the InterDigital v. Lenovo appeal in the UK (July 14, 2024 ip fray article) will serve as a key point of reference and might require InterDigital to make major concessions to Xiaomi.