Huawei Technologies Co. lost its bid to avoid paying what it called excessive patent royalties to InterDigital Inc. for technology related to how wireless devices work. InterDigital rose 4.6 percent on the news.
The Paris Court of Appeal rejected a bid by Huawei to nullify an award set by an international arbitration tribunal, InterDigital said in a regulatory filing on Tuesday. The amount that Huawei will have to pay wasn’t disclosed.
InterDigital has been fighting with Huawei for years, claiming the Chinese mobile device maker was using its technology without paying. The two sides agreed to binding arbitration to determine what a fair royalty rate would be.
Once the rate was determined, InterDigital asked a New York court to confirm the award, while Huawei asked the Paris court to annul it. Now that the Paris court has ruled, InterDigital said it will ask the U.S. District Court for the Southern District of New York to confirm the award.
InterDigital rose to $2.51 to $56.60 in New York trading to its highest price since July.
The dispute has been swept up in a broader debate throughout the wireless industry on how to value the fundamental technology that enables mobile devices to communicate.
“We think this experience represents an example of how arbitration can be a very effective dispute resolution mechanism in mobile standards licensing disputes,” said InterDigital Chief Executive Officer William Merritt, in a statement.
Huawei is considering its next steps, said William Plummer, a spokesman for Huawei.
“We will evaluate the Court’s decision and take all necessary action to protect our legitimate rights and interests, including, if appropriate, appealing the decision,” he said in a statement.
In China, a court has ruled that InterDigital had not met its obligation to license its patented technology on fair and reasonable terms and instead had demanded excessive royalties. InterDigital is seeking a retrial in that case and the rate that’s applicable to InterDigital’s Chinese patents.
(Updates with shares in first and fifth paragraphs.)