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| 1 minute read

InterDigital continues taking an Apple a day

It has been reported in an SEC filing that InterDigital has renewed its patent licence agreement with Apple. As the article noted, InterDigital had been confident of a renewal given the long-standing relationship. However, Apple's recent stint of litigation with the likes of Optis and Ericsson had given some pause for thought.

The key piece of the puzzle is the financial amount, about which we know comparatively little. The SEC filing explains that InterDigital expects to realise circa $134m per year for seven years ($938m over the term). As those in the space will know, absent detailed information about the licence structure and what it covers, it is impossible to backwards engineer that figure with any accuracy. However, just for fun, let's look at roughly what that means if the licence only covers 4G/5G:

Annual amountApple annual iPhone salesPer unit rate% rate (ASP $200)
$134mc.234m$0.57 (2dp)0.286%

(Annual iPhone sales based on a Google search of publicly available estimates for 2021.)

InterDigital's program rates are freely available on its website (here) - the headline rate for 5G is 0.60% with an ASP cap of $200 (so $1.20 per unit for an iPhone). It would therefore appear that Apple is paying in the region of 50% of InterDigital's program rates (and here is when one must repeat the earlier caveat about financial information).

At present, the English High Court is cogitated over InterDigital v Lenovo. That case has been put by the parties based on the comparables available, and covers various other territory such as the relevance of foreign FRAND decisions. However, of note is the fact that Lenovo was publicly contending for a per unit rate (at least on one of its cases) of $0.21 to $0.29, which would be a significantly lower figure than Apple has agreed. It will be interesting to see where the English High Court comes out in due course.

On September 30, 2022, InterDigital, Inc. (the “Company”) renewed a patent license agreement with Apple, Inc. The Company expects to recognize approximately $134 million in revenue each year over the seven-year term of the license, which commenced on October 1, 2022.


patent litigation, sep frand disputes, technology

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