InterDigital to Samsung: Pay Up

Being a licensor of intellectual property means one thing: You need a lot of lawyers, because you end up suing a lot of people. Wireless technology provider and Motley Fool Stock Advisor recommendation InterDigital Communications (Nasdaq: IDCC  ) launched its latest salvo against Samsung recently, filing a patent lawsuit as well as a complaint with the U.S. International Trade Commission (ITC), and claiming that Samsung is selling products in the U.S. that use its technology without a license.

The complaint to the ITC mentions several of Samsung's handsets, including the popular new BlackJack smartphone available from AT&T's (NYSE: T  ) Cingular Wireless. InterDigital wants to halt importation and sales of a number of infringing products, because it has not yet reached an agreement with Samsung on royalties for including InterDigital's technology in these products.

This isn't the first time InterDigital and Samsung have been on opposite sides of a lawsuit. According to InterDigital, Samsung has been dragging its feet in a past arbitration ruling on an earlier generation of products using InterDigital's technology. Samsung has been disputing the amount owed to InterDigital, in light of a settlement between InterDigital and Nokia (NYSE: NOK  ) in April 2006. Apparently, Samsung thinks it should get a royalty rate like that offered to Nokia, but InterDigital wants Samsung bound to the original arbitration settlement, which totals $134 million.

The latest spat between InterDigital and Samsung recalls fellow patent licensor Qualcomm's (Nasdaq: QCOM  ) ongoing dispute with Nokia. In both cases, the companies are struggling to agree on the exact worth of their patents. Interestingly, Qualcomm and InterDigital were suing each other in the early 1990s -- they've long since settled -- over ownership of wireless patents related to those at the center of today's disputes.

InterDigital investors would be best served by a quick resolution to the dispute, since Samsung is holding back payment to InterDigital until the amount is finalized. A settlement will help InterDigital further boost its cash hoard of $264 million. That's more than enough money to continue paying its legal team.

For related Foolishness:

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• Dial "0" for Lawsuit

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Fool contributor Dave Mock suggested arbitration in a dispute with his 5-year-old daughter, but he lost big-time in the courtroom of Mom. He owns shares of Qualcomm. As mentioned, InterDigital is a Stock Advisor pick. Dave is the author of The Qualcomm Equation. The Fool has a disclosure policy.