SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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): February 9, 1996
INTERDIGITAL COMMUNICATIONS CORPORATION
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(Exact name of issuer as specified in charter)
PENNSYLVANIA 1-11152 23-1882087
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(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) file number) Identification
Number)
781 Third Avenue, King of Prussia, Pennsylvania 19406-1409
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(Address of principal executive offices)
(610) 878-7800
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(Registrant's telephone number, including area code)
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Item 5. Other Events
InterDigital Communications Corporation and its subsidiary InterDigital
Technology Corporation (together referred to as InterDigital(R)) and Siemens AG
announced on February 9, 1996 that they have entered into a broad alliance with
Samsung Electronics Co., Ltd.
InterDigital's UltraPhone(R) digital wireless local loop (WLL)
telecommunications products and InterDigital's patents, including its Code
Division Multiple Access (CDMA) patents will be licensed to Samsung, together
with its proprietary Broadband Code Division Multiple Access(TM) (B-CDMA(TM))
air interface technology.
Samsung has agreed to make a financial contribution to InterDigtal in
excess of $35 million (of which approximately one-half constitutes royalty
prepayments), which after application of certain Korean taxes and transaction
costs is expected to result in a net amount of approximately $28 million.
Payment and final transaction effectiveness are subject to receipt of Korean
regulatory approval, which is anticipated to take approximately forty-five days.
Approximately 60% of the total amount is due to be paid upon regulatory
approval, with the remaining portion paid on or before June 15, 1996.
Samsung will also provide 35 engineering man-years to the alliance for the
development of B-CDMA technology. Samsung will participate, together with
InterDigital and Siemens AG, in the development of B-CDMA technology and digital
wireless access products. An initial objective is to create a B-CDMA based WLL
product. The eventual objective is to establish B-CDMA technology as a worldwide
standard for Personal Communications Services (PCS). InterDigital defines "True
PCS(TM)" to provide bandwidth on demand: from ISDN to multi-media, including
high-speed data, high fidelity audio and video. Under a combined B-CDMA patent,
know-how and trademark license, Samsung will pay InterDigital a running royalty
based on a percentage of the selling price of products that incorporate B-CDMA
technology sold by Samsung.
UltraPhone technology will also be transferred to Samsung, under a
royalty-bearing license, enabling it to manufacture and sell privately labeled
systems. InterDigital and Samsung anticipate that with Samsung's expertise in
low cost, high quality manufacturing it may become a significant UltraPhone
supplier to InterDigital, allowing InterDigital to increase gross profit margins
on its own products and sales. Payments by Samsung under other patent licenses
were concluded at market rates and on terms and conditions similar to licenses
entered into by InterDigital with other companies.
InterDigital and Siemens have amended their agreements of December 16, 1994
to include Samsung in the B-CDMA development program and to facilitate the broad
technology sharing and close working relationship anticipated by these recent
agreements.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERDIGITAL COMMUNICATIONS CORPORATION
Date: February 12, 1996 By:/s/ Howard E. Goldberg
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Howard E. Goldberg
Executive Vice President,
Secretary and General Counsel
