About InterDigital

InterDigital, Inc. (InterDigital) operates as a global research and development company. The company focuses primarily on wireless, video, artificial intelligence (AI), and related technologies. The company designs and develops foundational technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services. The company licenses its innovations worldwide to companies providing such products and services, including makers of wireless communications devices, consumer electronics, IoT devices, cars and other motor vehicles and providers of cloud-based services, such as video streaming. As a leader in wireless technology, the company’s engineers have designed and developed a wide range of innovations that are used in wireless products and networks, from the earliest digital cellular systems to 5G and today's most advanced Wi-Fi technologies. The company is also a leader in video processing and video encoding/decoding technology, with a significant AI research effort that intersects with both wireless and video technologies. InterDigital is one of the largest pure research and development and licensing companies in the world, with one of the most significant patent portfolios of fundamental wireless and video technologies. As of December 31, 2023, InterDigital's wholly owned subsidiaries held a portfolio of more than 30,000 patents and patent applications related to wireless communications, video coding, display technology, and other areas relevant to communications and entertainment products and services. The company’s portfolio includes numerous patents and patent applications that are or may be essential to existing standards, or may become essential to future standards, established by many Standards Development Organizations (SDOs). The company has contributed technology to wireless standards including the 3G, 4G, and 5G cellular standards and the IEEE 802 suite of standards. The company has contributed technology to video standards, including standards established by ISO/IEC Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET), among others. The company’s wireless portfolio has largely been built through internal development, supplemented by joint development projects with other companies, and select acquisitions of patents and companies. The company’s video technology portfolio combines patents and applications that InterDigital obtained through the acquisitions of the patent licensing business and research and innovation unit of visual technology industry leader Technicolor SA and patents and applications created by internal development. The company’s patented inventions have been implemented in a wide variety of products, including smartphones, other wireless communication devices and infrastructure equipment, such as tablets, and base stations, consumer electronics and Internet of Things (IoT) products, such as televisions, laptops, gaming consoles, set-top boxes, streaming devices and connected automobiles. In addition, the company’s patented inventions have been implemented in a wide variety of services, such as video streaming and other cloud-based services. InterDigital derives revenues primarily from licensing the company’s patented innovations. Strategy The company’s strategy is to continue to be a leading innovator, designer and developer of fundamental, horizontal technologies and to receive fair compensation from the companies that implement its patented innovations in their products and services across licensing programs. To execute its strategy, the company intends to grow and enhance its patent portfolio through continued investment in advanced research and development; maintain a collaborative relationship with key industry players and worldwide standards bodies; grow its patent-based revenue; pursue strategic research partnerships with other technology companies; and attract and retain top talent in wireless, video and AI research, patent portfolio creation, and licensing. Technology Research and Development InterDigital R&I InterDigital operates a diversified research and development operation, InterDigital Research & Innovation (InterDigital R&I). As an early and ongoing participant in the digital wireless market, InterDigital has developed pioneering solutions for the cellular and Wi-Fi technologies that enable wireless transmission of voice, data and multimedia content in use today. That early involvement and the company’s continued development of advanced digital wireless technologies have enabled it to create its significant worldwide portfolio of patents. InterDigital is also a leader in key video technologies, including emerging technologies, such as immersive video and AI-based video coding. The company’s current research efforts are focused on a variety of areas related to future technology and devices, including cellular wireless technology, advanced video coding and transmission, and AI. The InterDigital R&I team’s technical expertise is recognized by the worldwide wireless and video standards bodies where the company’s delegates hold key leadership positions. The company’s capabilities in the development of advanced technologies are based on the efforts of a highly specialized engineering team, leveraging leading-edge equipment and software platforms. In 2023, the company’s research and innovation costs were $78.3 million, and the largest portion of this expense has been personnel costs. Wireless Technology The company is developing cellular technologies, including those related to CDMA and TDMA and OFDM/OFDMA and MIMO. Many of the company’s inventions are being used in all 2G, 3G, 4G and 5G wireless networks and mobile terminal devices. The company continues to be engaged in development efforts to build and enhance its 3GPP (as defined herein) technology portfolio in the current and future generations including 5G, 5G Advanced and 6G. The horizontal technologies the company develops essential to support a variety of use cases across several vertical market segments that use connected devices, such as automobiles and autonomous vehicles, wearables, smart factories and smart homes, robots, drones and many other connected consumer electronic products, including mobile phones and tablets. The company is developing evolutionary and revolutionary solutions that enable connectivity in both licensed and unlicensed spectrum, terrestrial and non-terrestrial networks to provide ubiquitous coverage, across a large range of frequencies up to the terahertz (THz) wave bands. Segments outside of 3GPP primarily fall within the scope of the IEEE 802 and IETF standards. The company continues to grow a portfolio of technology related to Wi-Fi, Internet Standards, and Edge Computing, that includes, for example, improvements to the IEEE 802.11 PHY and MAC to increase peak data rates (802.11be - Extremely High Throughput), cloud gaming, security, and terminal mobility for edge services. Advanced Video Coding and Transmission Technology An important and growing segment of wireless traffic is devoted to video streaming. The company has a rich history in developing advanced technologies that address the challenges of video as it relates to mobile. Specifically, in the area of video research, the company has a long history of research and innovation in technologies that provide the basis for nearly all of the modern video codecs. The company has been actively engaged in video standards development work in the ISO/IEC Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET). Those efforts have focused on H.265/High Efficiency Video Coding (HEVC) versions 1 to 4, as well as development of the VCC/H.266 and the MPEG Immersive (MPEG-I) standards suite for the future. InterDigital R&I is conducting research in groundbreaking technologies preparing for the next generation of video codecs beyond VVC, investigating new media coding, such as point cloud compression, haptics or avatars using both traditional and AI-based techniques. Even codecs, such as AV1/VP9, developed by non-standard groups use fundamental techniques the company has been instrumental in developing. Artificial Intelligence/Machine Learning (AI/ML) InterDigital is using AI to drive both wireless and video standards towards the future, leveraging AI as a valuable tool to drive efficiency and new capabilities in wireless networks and in video compression and delivery systems. The company is researching a variety of aspects of AI that can be applied to complex problems in video and wireless technologies. Those areas of research include energy-efficient deep learning, aimed at reducing the energy-intensive rollout of AI; deep video compression, seeking to design novel video codecs based on deep learning techniques and optimized for different use cases (e.g., for machine consumption); and AI for dynamic wireless environments, which could help enhance and optimize wireless systems, particularly when channel characteristics are highly dynamic. Patent Portfolio As of December 31, 2023, the company’s patent portfolio consisted of more than 30,000 patents and patent applications worldwide. The patents and applications comprising the company’s portfolio relate predominantly to cellular wireless standards, including 3G, 4G and 5G technologies, other wireless standards, including 802.11 (Wi-Fi) technology, and a variety of video technologies and standards, such as HEVC and VVC. The company’s issued patents expire at differing times ranging from 2024 through 2043. The company generally receives newly issued patents on a weekly basis, which further extend the coverage of newly developed technologies and expiration dates of its patents. Revenue Sources Device-based Licensing Revenue Companies making, importing, using or selling products compliant with the standards covered by the company’s patent portfolio, including all manufacturers of mobile handsets, tablets and other devices, and many consumer electronics products, such as televisions, personal computers and other devices, require a license under the company’s patents. The company has successfully entered into patent license agreements with many of the leading mobile communications and consumer electronics companies globally, including Amazon Technologies, Inc. (Amazon), Apple Inc. (Apple), Lenovo Group Limited (Lenovo), Google LLC (Google), LG Electronics, Inc. (LG), Samsung Electronics Co., Ltd. (Samsung), Sony Corporation of America (Sony), and Xiaomi Corporation (Xiaomi), among others. Licensing Through Platforms As part of the Technicolor Patent Acquisition, the company assumed Technicolor's rights and obligations under a joint licensing program with Sony relating to digital televisions (DTVs) and standalone computer display monitors (CDMs) (such program, the Madison Arrangement), including Technicolor's role as exclusive licensing agent. Under the Madison Arrangement, Technicolor and Sony combined portions of their respective DTV and CDM patent portfolios and created a combined licensing opportunity for DTV and CDM manufacturers. As licensing agent for the Madison Arrangement, the company is responsible for making decisions regarding the prosecution and maintenance of the combined patent portfolio and the licensing and enforcement of the combined patent portfolio in the field of use of DTVs and CDMs. In 2016, InterDigital joined Avanci, the industry’s first marketplace for the licensing of cellular standards-essential technology for the IoT. The licensing platform brings together many of InterDigital’s peers in standards-essential technology leadership, and makes 2G, 3G, 4G, and 5G standards-essential patents available to IoT players in specific product segments with one flat-rate license. The Avanci licensing programs in specific product segments for the IoT industry will provide access to the entire applicable standards-essential wireless patent portfolios held by all of the platform participants, as well as any additions to their portfolios during the term of the license. Since December 2017, Avanci has primarily focused on the automotive market, and has signed patent license agreements with BMW Group, Audi, Porsche, Volkswagen, and Volvo Cars, among others, collectively representing over 80% of annual connected car shipments. Smartphone, Consumer Electronics, IoT, and Video Services Industries The primary markets for the company’s wireless and video technologies are the smartphone, consumer electronics, IoT/Automotive, and Video Services markets. Standardization InterDigital often publicly characterizes aspects of its business, including license agreements and development projects, as pertaining to industry standardized technologies such as, for example, 3G, 4G, 5G, Wi-Fi, HEVC, and VVC. In doing this, the company generally relies on the positions of the applicable SDOs in defining the relevant standards. 2023 Patent Licensing Activity During 2023, the company entered into eight patent license agreements as discussed below. Direct Licenses In 2023, the company signed a multi-year, worldwide, non-exclusive, royalty bearing license with Lenovo, covering InterDigital’s HEVC patents (the Lenovo HEVC PLA). The new license resolved all related HEVC litigation at the time. The company also entered into a multi-year, worldwide, non-exclusive, royalty bearing license with TCL Communication Technology Holdings, Ltd. covering InterDigital’s portfolio of 3G and 4G patents. In 2023, the company also entered into five other licenses covering digital televisions, set-top boxes, and/or video patents, including licenses with Humax Co., Ltd., Alps Alpine Co., Ltd., Panasonic Entertainment & Communication Co., LTD., and Funai Electronic Co., LTD. Customers In fiscal 2023, revenues (in descending order) from Lenovo, Apple, Samsung, and Xiaomi each comprised 10% or more of the company’s consolidated revenues. In 2022, the company renewed a multi-year, royalty-bearing, worldwide and non-exclusive patent license agreement with Apple (the Apple PLA). The agreement sets forth terms covering the sale by Apple of its products and services, including, but not limited to, its 3G, 4G, and 5G cellular and wireless-enabled products. The term of the Apple PLA extends through September 30, 2029. In 2022, the company agreed to renew its patent license agreement with Samsung and enter into binding arbitration to determine the final terms of the license, including the amount payable by Samsung under the new agreement. In 2021, the company entered into a multi-year, worldwide, non-exclusive, royalty bearing license with Xiaomi. The license covers Xiaomi’s cellular-enabled mobile devices under the company’s standard essential patents related to 3G, 4G, 5G, WiFi and HEVC and extends through December 31, 2025. Trademarks InterDigital is a registered trademark of the company. History InterDigital, Inc. was founded in 1972. The company was incorporated in 1972 under the laws of the Commonwealth of Pennsylvania.