Apple intends to spend almost $1 billion over the next seven years for a patent license from InterDigital. The move could suggest Apple’s continued readiness to work with companies like Ericsson and Nokia on similar patent-licensing deals.
“InterDigital, Inc. (the “Company”) renewed a patent licence agreement with Apple, Inc on September 30, 2022,” InterDigital noted in a brief SEC filing Monday. “Over the seven-year duration of the licence, which began on October 1, 2022, the Company expects to recognise about $134 million in revenue each year.”
InterDigital did not provide any additional information. However, the problem had been pressed against the R&D firm. InterDigital focuses on developing high-end technologies, especially those in the 5G space, and then monetizing its patents through licensing deals.
“Apple has been our licensee since 2007 before the shift of the very first iPhone,” InterDigital CEO Liren Chen said in August during his company’s most recent quarterly conference call, according to a Seeking Alpha transcript. “So, such a long-term relationship here there has been multiple renewals happening. We feel confident about the current negotiation based on how much our technology has advanced; frankly, they have become even more important with the connected world with a lot of market video content being consumed on the device.”
He also pointed out that InterDigital’s deal with Samsung – the world’s other big smartphone maker – is also up for renewal in the fourth quarter of this year.
“It’s worth noting that both Apple and Samsung have a much higher concentration of premium devices in their worldwide sales. So these devices will make more and better use of our high-end technology,” InterDigital’s Chen suggested.
It’s unclear how InterDigital’s agreement with Apple will affect Apple’s continuing negotiations with Ericsson. The two have been engaged in a new patent-licensing war for about a year, with Ericsson attempting to increase patent-licensing revenues from Apple through its 5G patent portfolio.
And Ericsson appears to be hardening its stance against Apple. According to Florian Mueller, an intellectual property specialist who runs the Foss Patents website, the United States International Trade Commission (ITC) issued a fresh order late last month that puts Ericsson “in terrific health.”
Mueller said that, at this point, Apple is suffering major legal difficulties, and that it is feasible that the iPhone vendor will reach a cross-licensing patent arrangement with Ericsson before the trial begins in December start of a trial on the topic.
Mueller has also speculated that Apple may soon need to ink a new deal with Nokia for 5G patents also. Nokia, for its part, is working to assert its 5G patents against a range of smartphone makers. In that effort, the company recently managed to convince a German court to ban the sale of Oppo smartphones in that country in order to force Oppo to the negotiating table.