EXHIBIT 10.82
InterDigital Group/LGE Execution
Copy (01-18-06)
Confidential & Proprietary
CONFIDENTIAL PORTIONS OF THIS
DOCUMENT HAVE BEEN REDACTED AND
FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
Wireless Patent License
Agreement
Between
InterDigital Group
And
LG Electronics
Inc.
Dated and Effective as of
January 1, 2006 (“Effective Date”)
InterDigital Group/LGE Execution Copy
(01-18-06)
Confidential & Proprietary
PATENT LICENSE
AGREEMENT
THIS IS A PATENT LICENSE AGREEMENT
(the “Agreement”), dated as of January 1, 2006
(the “Effective Date”), between InterDigital Technology
Corporation, a Delaware corporation having a mailing address of
3411 Silverside Road, Concord Plaza, Wilmington, Delaware 19810,
Tantivy Communications, Inc., a Delaware corporation having a
mailing address of 3411 Silverside Road, Concord Plaza, Wilmington,
Delaware 19810, and IPR Licensing, Inc., a Delaware corporation
having a mailing address of 3411 Silverside Road, Concord Plaza,
Wilmington, Delaware 19810 (individually and together, the
“InterDigital Group”), and LG Electronics Inc.
(“Licensee”), a Korean corporation, having a mailing
address of LG Twin Towers, 20, Yeouido-dong, Yeongdeungpo-gu,
Seoul, Korea 150-721.
PREAMBLE
InterDigital Group represents that
it owns and has the right to license the Licensed Patents and is
willing to grant a worldwide, non-exclusive license under the
Licensed Patents on the terms set forth below. Licensee desires to
obtain such a license.
NOW, THEREFORE
, in consideration of the mutual
promises contained herein the parties agree as follows:
ARTICLE I -
DEFINITIONS
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1.1
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“AAA” means the American Arbitration
Association.
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1.2
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“AAA
International Rules” means the AAA’s then current ICDR
International Arbitration Rules.
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1.3
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“Additional Sales” represents the
number of Licensed Terminal Units to be Sold on or after the
Acquisition Date and during the remainder of the Term of this
Agreement (on a quarter by quarter basis) that would be
attributable to a Terminal Unit Business that was Acquired by
Licensee or a Licensee Affiliate on or after the Effective Date, as
opposed to ordinary, organic Sales growth by Licensee and its
Affiliates (other than Acquired Terminal Unit Businesses).
Additional Sales, with respect to an Acquired Terminal Unit
Business, shall be calculated as the [ ***].
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1.4
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“Action” means any legal or
administrative action anywhere in the world seeking to invalidate,
render unenforceable, or limit or construe the scope of any
Licensed Patent that take place between January 1, 2006 and
December 31, 2010.
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1.5
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“Affiliate” means a legal entity
that is controlled by a party to this Agreement or is more than
fifty percent (50%) owned, directly or indirectly, by a party. Such
legal entity shall constitute an Affiliate of the party only so
long as the ownership or control exists. IDCC shall not constitute
an Affiliate of InterDigital Group.
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***
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Confidential
material which has been omitted and filed separately with the
Securities and Exchange Commission.
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Confidential & Proprietary
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1.6
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“Acquire” or
“Acquisition” means the acquisition (direct or
indirect) of the control of an entity or the acquisition (direct or
indirect) of more than fifty percent (50%) of the ownership of the
business, stock, or assets of an entity.
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1.7
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“Acquisition Date” means the date on
which Licensee or any of its Affiliates Acquires a Terminal Unit
Business.
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1.8
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“Arbitration Panel” means a panel of
three (3) arbitrators, all of whom shall be admitted to practice
law in at least one jurisdiction in the United States, and at least
two of whom shall have substantial experience in the field of
intellectual property litigation or intellectual property
licensing.
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1.9
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“IDCC” means InterDigital
Communications Corporation, having an office at 781 Third Avenue,
King of Prussia, PA 19406.
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1.10
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“GSM
Licensed Terminal Unit” means a Terminal Unit designed to
operate substantially in accordance with GSM, GPRS, or EDGE, each
as amended from time to time, and no other standard or
specification for CDMA- and TDMA -based communications
systems.
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1.11
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“Infrastructure Equipment” means
mobile switching centers, radio network controllers, service nodes,
Node B’s, base stations, radio resource management devices
and software, base station controllers, digital transceivers,
digital channel cards, and software necessary to operate the
aforementioned devices (including software maintenance agreements)
whether sold as individual items or bundled as an integrated
product, which are used to interconnect a Terminal Unit to a public
or private data or voice network (whether wired or unwired),
including the Internet.
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1.12
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“Knock-Down Unit” means a
substantially complete Licensed Terminal Unit sold to a third party
in a partially assembled or disassembled form for final
manufacturing, packaging, sale and distribution.
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1.13
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“Licensed
cdma2000 Infrastructure” means Infrastructure Equipment
designed to operate substantially in accordance with CDMA2000
[including 1x, EV-DV, EV-DO], as amended from time to time, and no
other standard or specification for CDMA- and TDMA -based
communications systems.
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1.14
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“Licensed
Patents” mean all currently issued patents, and patents that
issue from applications filed prior to or during the Term of this
Agreement, including patents issuing from divisionals,
continuations, and continuations-in-part of such applications, and
reissue and reexamination patents thereof, which InterDigital Group
or any of their Affiliates at any time during the Term owns
(including ownership as a result of acquisition).
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1.15
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“Licensed
Standards” mean the following PHS, PDC, iDen, GSM, GPRS,
EDGE, IS-54/136, DECT, TETRA, W-CDMA (FDD and TDD), TDSCDMA,
CDMA2000 [including 1x, EV-DV, EV-DO], and similar standards
adopted on a regional basis (e.g. ARIB FDD), each as amended from
time to time. TIA/EIA 95 shall not constitute a Licensed
Standard.
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Confidential & Proprietary
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1.16
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“Licensed
Business” means an entity other than Licensee or its then
current Affiliates which is involved in the design, development,
manufacture, distribution or sale of Licensed Terminal Units, which
is licensed to Sell Licensed Terminal Units by InterDigital Group
as a whole.
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1.17
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“Licensed
Terminal Units” means Terminal Units designed to operate
substantially in accordance with at least one of Licensed
Standards.
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1.18
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“Licensee” means LG Electronics
Inc.
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1.19
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“Licensee
Patents” mean all currently issued patents, and patents that
issue from applications filed prior to or during the Term of the
license, including patents issuing from divisionals, continuations,
and continuations-in-part of such applications, and reissue and
reexamination patents thereof, for which Licensee or any of its
Affiliates at any time during the Term owns (including ownership as
a result of acquisition).
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1.20
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“Market
Factor” means an [ ***].
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1.21
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“Market
Share” means the world-wide market share for an entity
Selling Licensed Terminal Units, as reported in the then most
recent Strategy Analytics (or other agreed to)
report.
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1.22
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“Net
Selling Price” means the amount actually invoiced to the
customer for a Licensed Terminal Unit (including battery and
charger), excluding the amount shown on the invoice for the actual
cost of packing, insurance, shipping and handling, applicable
import, export and excise duties and sales tax (including VAT added
by Licensee to the completed Licensed Terminal Unit), and reduced
by, returns, price protection credits, and trade discounts given to
the customer in the normal course of business. To the extent the
Net Selling Price relating to any Sale is subsidized by additional
consideration, the fact that the customer is a related party, or
otherwise, the Net Selling Price shall be adjusted upwards to an
amount that would have been charged in the absence of such
factors.
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1.23
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“Related
Companies” means Affiliates of, parent companies of, and
companies under common control with InterDigital Group.
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1.24
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“Sale” means the first sale made on
an arms-length basis to an entity other than an Affiliate. A
warranty replacement shall not constitute a Sale.
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1.25
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“Sell” means the act of making a
Sale.
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1.26
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“Term” means the term of this
Agreement, as set forth in Section 4.1.
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1.27
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“Terminal
Unit” means an end-user terminal device, whether fixed,
mobile, vehicular, portable, or hand-held, having RF transmit
and/or RF receive capabilities, which device is designed for
wireless voice and/or data communications. An end-user terminal
device includes without limitation handsets, Wireless Modules,
wireless-enabled PDAs and computers, communication cards (e.g.,
PCMCIA card), and Knock-Down Units.
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***
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Confidential
material which has been omitted and filed separately with the
Securities and Exchange Commission.
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Confidential & Proprietary
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1.28
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“Terminal
Unit Business” means an entity other than Licensee or its
then current Affiliates which is involved in the design,
development, manufacture, distribution or sale of Licensed Terminal
Units, which Terminal Unit Business has a [ ***] at the time of its Acquisition by Licensee or an
Affiliate of Licensee.
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1.29
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“Unlicensed Sale” means a Sale of a
Licensed Terminal Unit without (or outside of the scope of) a
license granted by InterDigital Group.
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1.30
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“Unlicensed Terminal Unit Business”
means a Terminal Unit Business that is not licensed to Sell
Licensed Terminal Units by InterDigital Technology Corporation or
InterDigital Group as a whole.
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1.31
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“Wireless
Module” means a device that is a fully integrated wireless
communications product, including all required ASICs, which is sold
to a third party for physical integration into other devices such
as handsets, vending machines, computers, laptop computers,
sensing/telemetry applications, motor vehicles and fixed wireless
telephone systems.
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ARTICLE II - LICENSE
GRANT & NON-ASSERTS
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2.1
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Grant . To the extent Licensee has paid each
installment of the License Fee as set forth in Section 3.1
herein and all royalties as set forth in Sections 3.3 and 3.4
herein (to the extent applicable) and provided Licensee is
otherwise not in default under this Agreement, InterDigital Group
hereby grants to Licensee and its Affiliates a non-exclusive,
non-transferable, worldwide, royalty-bearing license under the
Licensed Patents to develop, design, make, have made (to the extent
substantially designed by Licensee or its Affiliates), use, import,
sell, and otherwise distribute Licensed Terminal Units, alone but
not in combination with other third party equipment, including the
right to procure components therefore. In addition, provided
Licensee is not in default under this Agreement at the end of the
Term, Licensee shall be fully paid-up under and for the life of the
Licensed Patents as to GSM Licensed Terminal Units only at the end
of the Term.
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2.2
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Limitations
on License Grant . The
license granted under Section 2.1 above excludes Sales of
Terminal Units by an Acquired Unlicensed Terminal Unit Business
prior to its Acquisition Date and Additional Sales, in each case,
where Licensee elects to treat any of such Sales as Unlicensed
Sales. This license grant also excludes the right to grant
sublicenses. In addition, notwithstanding anything to the contrary,
the Section 2.1 license grant shall not include any license,
express or implied, to develop, design, make, have made, use,
import, sell, and otherwise distribute components covered by the
Licensed Patents, except to the extent that such components are
used solely to manufacture Licensed Terminal Units licensed
hereunder and which are Sold by Licensee and its
Affiliates.
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2.3
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Licensee
Non-Assert . Licensee
hereby covenants not to sue InterDigital Group, their Related
Companies, and/or each of their customers for infringement under
the Licensee Patents but only with
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***
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Confidential
material which has been omitted and filed separately with the
Securities and Exchange Commission.
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InterDigital Group/LGE Execution Copy
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Confidential & Proprietary
respect to products developed,
designed, manufactured, have manufactured (to the extent
substantially designed by InterDigital Group and/or its Related
companies), used, imported, sold, or otherwise distributed by
InterDigital Group and their Related Companies. In the event a
customer of either InterDigital Group or any of the Related
Companies sues Licensee or its Affiliates for patent infringement,
this covenant not to sue shall cease to apply as to such customer.
This covenant not to sue shall survive any sale or transfer of the
Licensee Patents to another entity. In addition, this covenant
shall (i) not apply to any Related Company which is not a
Related Company as of the Effective Date if such new Related
Company has a [ ***] as of the date that
such entity becomes a Related Company, or (ii) cease as to any
Related Company who sues Licensee or its Affiliates and/or any of
their customers for patent infringement.
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2.4
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InterDigital
Group Non-Assert. Provided Licensee is not in default under this
Agreement, InterDigital Group hereby covenants not to sue Licensee
and/or its Affiliates for infringement of the Licensed Patents for
the development, design, manufacture, having manufactured (to the
extent substantially designed by Licensee and/or its Affiliates),
use, importation, Sale, or other distribution of up to (but not
exceeding) an aggregate of [***] of Licensed cdma2000
Infrastructure (inclusive of Sales prior to the Effective Date),
but only if all of such activities occur in [***]. For the
avoidance of doubt, this non-assert does not extend to the [***] or
its activities regardless of whether such joint venture qualifies
as an Affiliate hereunder.
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ARTICLE III – LICENSE FEE
AND ADDITIONAL ROYALTY
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3.1
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License
Fee . In consideration
for the license, non-assert, and release granted herein, Licensee
shall pay to InterDigital Group a non-refundable license fee of Two
Hundred and Eighty Five Million Dollars (US$285,000,000.00), as set
forth below:
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Payment Due
Date
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US$95 Million
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Within 30 days of execution of this Agreement
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US$95 Million
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[***],
2007
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US$95 Million
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[***],
2008
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3.2
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Release. In further consideration of the irrevocable and
non-refundable, upfront payments of the License Fee set forth in
Section 3.1 above, effective upon payment of the first
installment of such License Fee, and contingent upon actual and
timely payment of the second and third installments of such License
Fee, InterDigital Group fully, finally, and irrevocably releases
Licensee, its Affiliates and their customers from any and all
claims from infringement of the Licensed Patents, which claims have
been made, or which might be made at any time, with respect to any
Licensed Terminal Units manufactured, used, leased, Sold or
otherwise transferred by or for Licensee before the Effective Date
of this Agreement. Notwithstanding the foregoing, this release
shall be irrevocable and the payment contingency will not be
effective if InterDigital Group terminates this Agreement prior to
all Licensee Fee payment due dates, unless the termination is for
non-payment of any License Fee installment.
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3.3
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Acquisition
of Unlicensed Terminal Unit Businesses.
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A. In the event Licensee or any of
Licensee’s Affiliates Acquires an Unlicensed Terminal
Unit
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***
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Confidential
material which has been omitted and filed separately with the
Securities and Exchange Commission.
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InterDigital Group/LGE Execution Copy
(01-18-06)
Confidential & Proprietary
Business, Licensee shall, within
sixty (60) days of the Acquisition Date, notify InterDigital
Group: (i) that the Acquisition has occurred and identify the
Unlicensed Terminal Unit Business and the general nature of the
Acquisition, (ii) of the [ ***],
providing supporting documentation together with such notification
and such other information that InterDigital Group may subsequently
reasonably request, (iii) of Licensee’s calculation of
the [***], providing supporting documentation with such
notification and such other information that InterDigital Group may
subsequently reasonably request, (iv) whether or not Licensee
elects to treat the Sales of Licensed Terminal Units by the
Unlicensed Terminal Unit Business prior to the Acquisition Date as
Unlicensed Sales, and (v) whether or no
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