InterDigital Gains After Settling With Huawei on Patent Case

Dec 24, 2013 1:26 pm ET

(Updates with closing share price in third paragraph.)

Dec. 24 (Bloomberg) -- InterDigital Inc. rose the most in almost two months after the mobile-phone design company said it agreed to binding arbitration to resolve a patent dispute with Huawei Technologies Co. that the Chinese company won in the U.S.

Arbitration “will yield what we’ve been seeking all along: a global licensing agreement,” InterDigital Chief Executive Officer William Merritt said in an e-mailed statement today.

InterDigital, based in Wilmington, Delaware, rose 4.2 percent to $29.92 at the close in New York, for the biggest one- day jump since Oct. 31.

The case escalated beyond a patent dispute when Merritt said Chinese regulators threatened to arrest or detain anyone who showed up for a Dec. 18 meeting to discuss Huawei’s antitrust complaints against his company in the U.S., Europe and China. Merritt told China’s National Development and Reform Commission no one would attend.

The U.S. International Trade Commission last week ruled Huawei, Nokia Oyj and ZTE Corp. didn’t infringe InterDigital patents for telephone technology. The agreement with Huawei doesn’t affect the other companies’ disputes, said Patrick Van de Wille, an InterDigital spokesman.

Huawei is “pleased that we have further been able to reach an agreement with InterDigital that puts an end to continued and expensive litigation,” William Plummer, a Washington-based spokesman for the gear maker, said in an e-mail today.

Huawei, ZTE and former mobile-industry leader Nokia, based in Espoo, Finland, said InterDigital was demanding unreasonable licensing fees on some patents. InterDigital said it made “offer after offer” and the companies refused to pay anything.

Huawei and ZTE, based in Shenzhen, are China’s two largest makers of phone-network equipment.

--Editors: Bernard Kohn, Niamh Ring