Introduction
Today, intellectual property litigation is an ordinary procedure between two or more technology firms. It can be said that this is almost a tradition in the consumable high-tech personal products business. It is especially prevalent in firms with dramatically different cultural backgrounds. The number of lawsuits between Western firms and Chinese companies related to the procedure for obtaining a license for technological patents, their actual use, and the distribution of related financial profits has dozens of cases.
Often, these have an element of scandal or an atmosphere of severe tension between two business partners due to accusations of contractual violations by one side or mutual claims by the other side. However, all these generalizations cannot be applied to the recent litigation between InterDigital and Lenovo. Their case is unique in terms of the behavior of both business entities. This paper will describe and analyze the recently concluded lawsuit stage between these Chinese and American actors in the consumer personal technology market.
Summary of the Litigation
The motivation that led InterDigital to file a lawsuit against its partner, Lenovo, is typical and not unique. According to Reuters (2023), it was the fact that “previous offers made by both Lenovo and InterDigital – which had offered $337 million for a six-year license – were not made on FRAND terms” (para. 4). The trial started in 2019 and has been going on for four years now.
As for now, the international business actor from China has to pay more than 100 million dollars to their American partner for 16 years of sales of mobile smart gadgets (Reuters, 2023). However, the plaintiff stated it would appeal because this ruling partially goes against their licensing program. The Unified Patent Court will consider further the case discussed.
Currently Peaceful Ending
It is particularly interesting to see how both parties reacted to the London High Court’s ruling. Both Lenovo’s official representatives and InterDigital’s senior management positively accepted and even welcomed this decision (Reuters, 2023). Such an amicable outcome rarely happens between two large business organizations when intellectual property is involved. Often, the dispute continues more aggressively, and the tension between the plaintiff and the defendant increases even more. One of the reasons why this stage of the litigation ended so peacefully, apart from the partnership, is that the whole case developed around Fair, Reasonable, and Non-Discriminatory (FRAND) terms.
FRAND Terms
FRAND terms play a critical role in how technology companies shape their potentially profitable partnerships. According to specialists, “FRAND allows anyone to access a wide range of standardized technology at a fair and reasonable rate, allowing them to build upon it for their own innovations” (FRAND licensing, 2019, para. 3). A permitted case of a company not following these could violate the principles of granting a license and intellectual property sharing, undermining existing partnerships and hindering progress in the industry of high-tech home devices.
Conclusion
Intellectual property and the way of granting it have always been a subject of frequent and emotionally charged trials in the numerous markets of various technologies. This brief case study analysis describes and interprets the recent verdict on a four-year argument between InterDigital and Lenovo. This trial is fascinating because of the friendly behavior of both parties and the central role of FRAND terms in the debate. Their case is an illustrative example of how regulation and industry influence the behavior of plaintiffs and defendants.
References
FRAND licensing and why is so important for technical standards. (2019). SHIP Global IP. Web.
Reuters. (2023). Lenovo must pay $138.7 million for InterDigital patents – London Court. U.S. News & World Report. Web.