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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): May 16, 2007
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InterDigital Communications Corporation
(Exact name of registrant as specified in its charter)
Pennsylvania 1-11152 23-1882087
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
781 Third Avenue, King of Prussia, PA 19406-1409
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 610-878-7800
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01. Other Events.
On May 16, 2007, the Arbitrator in the arbitration proceeding between
InterDigital Communications Corporation and its wholly-owned subsidiary
InterDigital Technology Corporation (collectively the "Company"), and Federal
Insurance Company ("Federal"), and relating to a Litigation Expense and
Reimbursement Agreement signed in February 2000 by the parties ("Reimbursement
Agreement"), refused to award the full amount of Federal's claim which was in
excess of $33 million. The Arbitrator did award Federal approximately $13
million, pursuant to a formula set forth in the Reimbursement Agreement, for
reimbursement of attorneys' fees and expenses previously paid to or on behalf of
the Company by Federal, plus approximately $2 million in interest. As additional
reimbursement of attorneys' fees and expenses, the Arbitrator awarded $5
million, without interest, as Federal's share under the Reimbursement Agreement
of "additional value" of the 2003 settlement between the Company and Ericsson
Inc. The approximately $13 million portion of the Award represents a percentage
of the amounts the Company has received since March 2003 from
Telefonaktiebolaget LM Ericsson and Ericsson Inc., and Sony Ericsson Mobile
Communications AB under their respective patent license agreements.
The Company has not yet determined whether it will contest all or any
portion of the Award. The United States District Court for the Eastern District
of Pennsylvania which referred the matter to arbitration had previously
reserved, to a later time, a decision on the issue of whether any arbitration
award would be binding on the parties.
Federal had provided partial reimbursement to the Company of certain legal
fees and expenses for the litigation settled in 2003 involving the Company and
Ericsson Inc., and had previously delivered to the Company a demand for
arbitration under the Pennsylvania Uniform Arbitration Act claiming that the
Reimbursement Agreement required the Company to reimburse certain attorneys'
fees and expenses paid by Federal in connection with the litigation between the
Company and Ericsson Inc. Prior to Federal's demand for arbitration, the Company
had accrued a contingent liability of $3.4 million related to the Reimbursement
Agreement. Regardless of any decision by the Company to contest all or any
portion of the Award, the Company expects to record an expense of approximately
$16.4 million in second quarter 2007 which amount represents the total amount of
the Award less the amount of the previously accrued liability.
This information updates information previously reported in the Company's
Form 10-Q for the quarter ended March 31, 2007.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
INTERDIGITAL COMMUNICATIONS CORPORATION
By: /s/Lawrence F. Shay
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Lawrence F. Shay
Chief Legal Officer & Government Affairs
Dated: May 18, 2007