Arbitrators Presiding Over Nokia’s Arbitration with InterDigital Issue Split Decision

July 05, 2005

- Panel Cuts InterDigital’s Royalty Demands By More Than Half - Questions Remain Regarding Enforceability

Espoo, Finland - On July 1, 2005, Nokia Corporation received a decision from the International Chamber of Commerce’s International Court of Arbitration in its pending arbitration with InterDigital Communications Corporation and InterDigital Technology Corporation. In the award, a split ICC arbitration panel purported to set royalty rates payable by Nokia to InterDigital on certain handsets and infrastructure equipment sold by Nokia.

The arbitration involved a license agreement entered into by Nokia and InterDigital in 1999 and Nokia’s most favored licensee rights under that agreement following InterDigital’s execution of licenses with Telefonaktiebolaget LM Ericsson and Sony-Ericsson Mobile Communications.

One of the three arbitrators presiding over the arbitration issued a lengthy and detailed dissent that raises significant issues regarding the enforceability of the decision. Nokia is currently evaluating its options in light of the dissent.

The royalty rates demanded by InterDigital have consistently served as an impediment to consensual resolution of the parties’ dispute over the last two years. Nokia is pleased that all three arbitrators concluded that the royalties being sought by InterDigital were unwarranted and reduced them by more than half. At the same time, Nokia must give due consideration to the issues regarding the enforceability of the decision, and will consider the option of moving to vacate or modify the majority decision in this matter.

InterDigital also commenced an action against Nokia on July 1 in the United States District Court for the Southern District of New York seeking to enforce the decision. If InterDigital pursues its enforcement action, Nokia intends to fully and vigorously oppose it and seek all remedies available to it under the parties’ agreement.

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