Free Answer to Amended Complaint - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE SAMSUNG ELECTRONICS CO., LTD., Plaintiff, vs. INTERDIGITAL COMMUNICATIONS, LLC, INTERDIGITAL TECHNOLOGY CORPORATION, and TANTIVY COMMUNICATIONS, INC., Defendants. ) ) ) ) ) ) ) ) ) ) ) )

C.A. No. 1:07-cv-00167-JJF

JURY TRIAL DEMANDED

DEFENDANTS' ANSWER TO FIRST AMENDED COMPLAINT AND COUNTERCLAIMS OF COUNSEL: Mark D. Flanagan Nathan Walker WILMER CUTLER PICKERING HALE AND DORR LLP 1117 California Avenue Palo Alto, CA 94304 Telephone: (650) 858-6000 Telecopier: (650) 858-6100 [email protected] [email protected] Ron E. Shulman Michael B. Levin WILSON SONSINI GOODRICH & ROSATI LLP 650 Page Mill Road Palo Alto, CA 94304 Telephone: (650) 493-9300 Telecopier: (650) 493-6811 [email protected] [email protected] Dated: November 19, 2007 Richard K. Herrmann #405 MORRIS JAMES LLP 500 Delaware Avenue, Suite 1500 Wilmington, DE 19801-1494 Telephone: (302) 888-6800 Telecopier: (302) 571-1750 [email protected] OF COUNSEL: Patrick J. Coyne Christopher P. Isaac FINNEGAN HENDERSON FARABOW GARRETT & DUNNER LLP 901 New York Avenue, NW Washington, DC 20001-4413 Telephone: (202) 408.4000 Telecopier: (202) 408.4400 Attorneys for Defendants InterDigital Communications, LLC, InterDigital Technology Corporation, and Tantivy Communications, Inc.

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Defendants

InterDigital

Communications,

LLC,

InterDigital

Technology

Corporation, and Tantivy Communications, Inc. (collectively, "InterDigital") hereby respectfully submit this answer to the First Amended Complaint ("Amended Complaint") filed by Samsung Electronics Co., Ltd. ("Samsung"): 1. InterDigital admits that Samsung has filed the Amended Complaint,

purporting to assert claims for relief against InterDigital. Otherwise, the allegations of Paragraph 1 are denied. More specifically, InterDigital denies that Samsung's claims have been properly pled and further denies that Samsung's claims have any merit. 2. On information and belief, InterDigital admits that Samsung is a Korean

corporation with offices in Seoul, Korea. On information and belief, InterDigital further admits that Samsung markets various electronic consumer devices, including wireless phones, under the brand name "SAMSUNG." InterDigital lacks knowledge or

information sufficient to form a belief as to the truth of the remainder of the allegations of Paragraph 2 and on that basis denies those allegations. 3. InterDigital admits that InterDigital Communications, LLC ("IDC LLC")

is organized as a limited liability company under the laws of the Commonwealth of Pennsylvania, and has its principal place of business at 781 Third Avenue, King of Prussia, Pennsylvania 19406. InterDigital also admits that IDC LLC develops circuitry designs, software, and other technology that is compliant with wireless communications standards. InterDigital further admits that IDC LLC develops semiconductors and

software to enable voice and data transmissions in mobile phones and portable computing devices. Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 3. 4. InterDigital admits that InterDigital Technology Corporation ("ITC") is

incorporated under the laws of the State of Delaware, and has its principal place of business at 3411 Silverside Road, Concord Plaza, Suite 105 Hagley Building, Wilmington, Delaware 19810. InterDigital further admits that ITC is a wholly owned

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subsidiary of InterDigital, Inc., and licenses technology developed by InterDigital. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 4. 5. InterDigital admits that Tantivy Communications, Inc. ("Tantivy") is

incorporated under the laws of the State of Delaware, with offices at 3411 Silverside Road, Concord Plaza, Suite 105 Hagley Building, Wilmington, Delaware 19810. InterDigital further admits that Tantivy is a subsidiary of InterDigital Advanced Technologies, Inc., which is a subsidiary of InterDigital, Inc. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 5. 6. Because Paragraph 6 consists solely of Samsung's legal conclusion

regarding jurisdiction, no answer is required. To the extent that any answer is required, InterDigital lacks knowledge or information sufficient to admit or deny the allegations and on that basis denies them. 7. 8. InterDigital admits the allegations of Paragraph 7. Because Paragraph 8 consists solely of Samsung's legal conclusion

regarding venue, no answer is required. To the extent that any answer is required, InterDigital lacks knowledge or information sufficient to admit or deny the allegations and on that basis denies them. 9. 10. InterDigital denies the allegations of Paragraph 9. InterDigital admits that Samsung and InterDigital entered into a license InterDigital

agreement that covered second-generation ("2G") technology in 1995.

further admits that Samsung and InterDigital are presently arbitrating the effect of royalty terms provided under Samsung's most-favored-licensee clause in that agreement. InterDigital also admits that Samsung has purported to assert claims in this action that relate exclusively to third-generation wireless ("3G") technology. expressly admitted, InterDigital denies the allegations of Paragraph 10. 11. InterDigital admits that certain standards development organizations Except as thus

("SDO") develop standards for use in the wireless telecommunications industry.

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InterDigital also admits that first generation ("1G") technology used analog signals. InterDigital further admits that second generation ("2G") standards are digital in nature and include GSM and CDMA. InterDigital also admits that most wireless service

providers operate on either the GSM or CDMA platforms. InterDigital admits that AT&T (formerly Cingular) and T-Mobile operate on the GSM network, while Verizon Wireless and Sprint/Nextel use CDMA. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 11. 12. On information and belief, InterDigital admits that 3G technology has

been anticipated by some persons or entities for anticipated capabilities to deliver multimedia and internet connectivity to cellular handsets. On information and belief, InterDigital further admits that 3G technology has held the potential promise of being a convergent standard that could resolve the incompatibility between certain 2G technology platforms. Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 12. 13. InterDigital admits that Samsung has purported to assert claims relating to

SDOs and rules promulgated by SDOs. InterDigital denies that Samsung's claims have any merit. InterDigital admits that certain SDOs evaluate technology and generate

standards. InterDigital lacks knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 13 and on that basis denies those allegations. 14. InterDigital lacks knowledge or information sufficient to form a belief as

to the truth of the allegations of Paragraph 14 and on that basis denies those allegations. 15. InterDigital admits that certain SDOs refrain from setting any commercial

license terms or attempting to articulate what terms would satisfy the FRAND standard. InterDigital lacks knowledge or information sufficient to form a belief as to the truth of the allegation that SDOs so refrain in order to avoid antitrust scrutiny. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 15.

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16.

InterDigital admits that it has participated in certain SDOs and has

disclosed this fact on InterDigital's Web site. InterDigital further admits that it has made the statement quoted in Paragraph 16. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 16. 17. InterDigital admits that it has disclosed the fact that it has participated in

certain SDOs. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 17. 18. InterDigital admits that ETSI, ATIS, TIA, ARIB, and ITU each have one InterDigital denies that the allegations of

or more policies for handling IPR.

Paragraph 18 fairly and accurately describe these policies. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 18. 19. InterDigital admits that ITC has notified ETSI that ITC is the proprietor of

IPRs that ITC believes may be considered essential to the UMTS standard. InterDigital also admits that ITC and/or its affiliates have declared to ETSI that they are prepared to grant irrevocable licenses under the IPRs on terms and conditions which are in accordance with Clause 6.1 of the ETSI IPR policy, in respect of the UMTS standard, to the extent that the IPRs remain essential. InterDigital further admits that ITC has

declared to ITU that, in case part(s) or all of any proposals contained in contributions submitted by ITC are included in ITU-R Recommendation(s) and the included part(s) contain items that have been patented or for which patent applications have been filed and whose use would be required to implement ITU-R Recommendation(s), ITC is prepared to grant a license to an unrestricted number of applicants on a worldwide, nondiscriminatory basis and on reasonable terms and conditions in accordance with the Statement on ITU-R Patent Policy (Resolution 1-2, Annex 1). Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 19. 20. InterDigital admits that InterDigital and Samsung have engaged in

negotiations regarding a potential license under InterDigital's 3G technology.

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InterDigital further admits that Samsung has claimed that it desires a license on FRAND terms; however, Samsung repeatedly has failed to accept offers from InterDigital for a license on FRAND terms. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 20. 21. InterDigital admits that Samsung has claimed that it desires a license from

InterDigital on FRAND terms; however, Samsung repeatedly has failed to accept offers from InterDigital for a license on FRAND terms. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 21. 22. InterDigital admits that it believes that Samsung's unlicensed production

of certain 3G-compatible products would infringe InterDigital patents. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 22. 23. 24. 25. 26. InterDigital denies the allegations of Paragraph 23. InterDigital denies the allegations of Paragraph 24. InterDigital denies the allegations of Paragraph 25. On information and belief, InterDigital admits that Samsung, together with

Samsung Telecommunications America LLP, filed a complaint in this action on March 23, 2007. InterDigital also admits that on March 23, 2007, IDC LLC and ITC asserted against Samsung and certain of its affiliates certain IPRs, of which ITC is the proprietor and that ITC believes may be considered essential to the UMTS standard, in a complaint filed in the United States District Court for the District of Delaware (Case No. 07-165-JJF, InterDigital Communications Corp. et al. v. Samsung Electronics Co., Ltd., et al.) and in a complaint filed in the United States International Trade Commission (Inv. No. 337-TA-601, In the Matter of Certain 3G Wideband Code Division Multiple Access (WCDMA) Handsets and Components Thereof). Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 26.

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COUNT I (Breach of Contract (the ETSI IPR Policy)) 27. In response to Paragraph 27, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 28. InterDigital admits that ETSI is an SDO. InterDigital lacks knowledge or

information sufficient to form a belief as to the truth of the remainder of the allegations of Paragraph 28 and on that basis denies those allegations. 29. InterDigital admits that InterDigital Communications Corporation is a InterDigital denies that ITC or Tantivy are members of ETSI.

member of ETSI.

InterDigital lacks knowledge or information sufficient to form a belief as to the truth of the allegation that Samsung is a member of ETSI, and on that basis InterDigital denies that allegation. InterDigital denies that the allegations of Paragraph 29 fairly and Except as thus expressly

accurately describe the obligations of members of ETSI. admitted, InterDigital denies the allegations of Paragraph 29. 30.

InterDigital denies that the allegations of Paragraph 30 fairly and

accurately describe the ETSI IPR policy. 31. InterDigital admits that ITC has notified ETSI that ITC is the proprietor of

IPRs that ITC believes may be considered essential to the UMTS standard. InterDigital also admits that ITC and/or its affiliates have declared to ETSI that they are prepared to grant irrevocable licenses under the IPRs on terms and conditions which are in accordance with Clause 6.1 of the ETSI IPR policy, in respect of the UMTS standard, to the extent that the IPRs remain essential. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 31. 32. 33. 34. InterDigital denies the allegations of Paragraph 32. InterDigital denies the allegations of Paragraph 33. InterDigital admits that Samsung purports to seek damages in this action;

however, InterDigital denies that Samsung has been damaged or is entitled to recover any

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damages.

Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 34. 35. InterDigital admits that Samsung purports to seek specific performance in

this action; however, InterDigital denies that Samsung is entitled to any such relief. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 35. COUNT II (Breach of Contract (the ETSI IPR Policy), with Samsung as an Intended, Third-Party Beneficiary) 36. In response to Paragraph 36, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 37. InterDigital denies that the allegations of Paragraph 37 fairly and

accurately describe the obligations of members of ETSI. InterDigital further denies the remaining allegations of Paragraph 37. 38. 39. InterDigital denies the allegations of Paragraph 38. InterDigital denies that the allegations of Paragraph 39 fairly and

accurately describe the ETSI IPR policy. 40. InterDigital admits that ITC has notified ETSI that ITC is the proprietor of

IPRs that ITC believes may be considered essential to the UMTS standard. InterDigital also admits that ITC and/or its affiliates have declared to ETSI that they are prepared to grant irrevocable licenses under the IPRs on terms and conditions which are in accordance with Clause 6.1 of the ETSI IPR policy, in respect of the UMTS standard, to the extent that the IPRs remain essential. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 40. 41. 42. 43. InterDigital denies the allegations of Paragraph 41. InterDigital denies the allegations of Paragraph 42. InterDigital admits that Samsung purports to seek damages in this action;

however, InterDigital denies that Samsung has been damaged or is entitled to recover any

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damages.

Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 43. 44. InterDigital admits that Samsung purports to seek specific performance in

this action; however, InterDigital denies that Samsung is entitled to any such relief. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 44. COUNT III (Breach of Contract (the ATIS IPR Policy)) 45. In response to Paragraph 45, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 46. InterDigital admits that ATIS is an SDO. InterDigital lacks knowledge or

information sufficient to form a belief as to the truth of the remainder of the allegations of Paragraph 46 and on that basis denies those allegations. 47. InterDigital admits that InterDigital Communications Corporation is a InterDigital denies that ITC or Tantivy are members of ATIS.

member of ATIS.

InterDigital lacks knowledge or information sufficient to form a belief as to the truth of the allegation that Samsung is a member of ATIS, and on that basis InterDigital denies that allegation. InterDigital denies that the allegations of Paragraph 47 fairly and Except as thus expressly

accurately describe the obligations of members of ATIS. admitted, InterDigital denies the allegations of Paragraph 47. 48.

InterDigital denies that the allegations of Paragraph 48 fairly and

accurately describe the ATIS IPR policy. 49. 50. 51. 52. InterDigital denies the allegations of Paragraph 49. InterDigital denies the allegations of Paragraph 50. InterDigital denies the allegations of Paragraph 51. InterDigital admits that Samsung purports to seek damages in this action;

however, InterDigital denies that Samsung has been damaged or is entitled to recover any

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damages.

Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 52. 53. InterDigital admits that Samsung purports to seek specific performance in

this action; however, InterDigital denies that Samsung is entitled to any such relief. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 53. COUNT IV (Breach of Contract (the ATIS IPR Policy), with Samsung as an Intended, Third-Party Beneficiary) 54. In response to Paragraph 54, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 55. InterDigital denies that the allegations of Paragraph 55 fairly and

accurately describe the obligations of members of ATIS. InterDigital further denies the remaining allegations of Paragraph 55. 56. 57. InterDigital denies the allegations of Paragraph 56. InterDigital denies that the allegations of Paragraph 57 fairly and

accurately describe the ATIS IPR policy. 58. 59. 60. 61. InterDigital denies the allegations of Paragraph 58. InterDigital denies the allegations of Paragraph 59. InterDigital denies the allegations of Paragraph 60. InterDigital admits that Samsung purports to seek damages in this action;

however, InterDigital denies that Samsung has been damaged or is entitled to recover any damages. Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 61. 62. InterDigital admits that Samsung purports to seek specific performance in

this action; however, InterDigital denies that Samsung is entitled to any such relief. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 62.

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COUNT V (Breach of Contract (the TIA IPR Policy)) 63. In response to Paragraph 63, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 64. InterDigital admits that TIA is an SDO. InterDigital lacks knowledge or

information sufficient to form a belief as to the truth of the remainder of the allegations of Paragraph 64 and on that basis denies those allegations. 65. InterDigital admits that InterDigital Communications Corporation is a InterDigital denies that ITC or Tantivy are members of TIA.

member of TIA.

InterDigital lacks knowledge or information sufficient to form a belief as to the truth of the allegation that Samsung is a member of TIA, and on that basis InterDigital denies that allegation. InterDigital denies that the allegations of Paragraph 65 fairly and accurately describe the obligations of members of TIA. InterDigital denies the allegations of Paragraph 65. 66. InterDigital denies that the allegations of Paragraph 66 fairly and Except as thus expressly admitted,

accurately describe the TIA IPR policy and "Engineering Manual." 67. 68. 69. 70. InterDigital denies the allegations of Paragraph 67. InterDigital denies the allegations of Paragraph 68. InterDigital denies the allegations of Paragraph 69. InterDigital admits that Samsung purports to seek damages in this action;

however, InterDigital denies that Samsung has been damaged or is entitled to recover any damages. Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 70. 71. InterDigital admits that Samsung purports to seek specific performance in

this action; however, InterDigital denies that Samsung is entitled to any such relief. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 71.

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COUNT VI (Breach of Contract (the TIA IPR Policy), with Samsung as an Intended, Third-Party Beneficiary) 72. In response to Paragraph 72, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 73. InterDigital denies that the allegations of Paragraph 73 fairly and

accurately describe the obligations of members of TIA. InterDigital further denies the remaining allegations of Paragraph 73. 74. 75. InterDigital denies the allegations of Paragraph 74. InterDigital denies that the allegations of Paragraph 75 fairly and

accurately describe the TIA IPR policy and "Engineering Manual." 76. 77. 78. 79. InterDigital denies the allegations of Paragraph 76. InterDigital denies the allegations of Paragraph 77. InterDigital denies the allegations of Paragraph 78. InterDigital admits that Samsung purports to seek damages in this action;

however, InterDigital denies that Samsung has been damaged or is entitled to recover any damages. Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 79. 80. InterDigital admits that Samsung purports to seek specific performance in

this action; however, InterDigital denies that Samsung is entitled to any such relief. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 80. COUNT VII (Breach of Contract (the ARIB IPR Policy)) 81. In response to Paragraph 81, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 82. InterDigital admits that ARIB is an SDO. InterDigital lacks knowledge or

information sufficient to form a belief as to the truth of the remainder of the allegations of Paragraph 82 and on that basis denies those allegations.

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83.

InterDigital admits that InterDigital Communications Corporation is a InterDigital denies that ITC or Tantivy are members of ARIB.

member of ARIB.

InterDigital lacks knowledge or information sufficient to form a belief as to the truth of the allegation that Samsung is a member of ARIB, and on that basis InterDigital denies that allegation. InterDigital denies that the allegations of Paragraph 83 fairly and

accurately describe the obligations of members of ARIB. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 83. 84. InterDigital denies that the allegations of Paragraph 84 fairly and

accurately describe the ARIB IPR policy. 85. 86. 87. 88. InterDigital denies the allegations of Paragraph 85. InterDigital denies the allegations of Paragraph 86. InterDigital denies the allegations of Paragraph 87. InterDigital admits that Samsung purports to seek damages in this action;

however, InterDigital denies that Samsung has been damaged or is entitled to recover any damages. Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 88. 89. InterDigital admits that Samsung purports to seek specific performance in

this action; however, InterDigital denies that Samsung is entitled to any such relief. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 89. COUNT VIII (Breach of Contract (the ARIB IPR Policy), with Samsung as an Intended, Third-Party Beneficiary) 90. In response to Paragraph 90, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 91. InterDigital denies that the allegations of Paragraph 91 fairly and

accurately describe the obligations of members of ARIB. InterDigital further denies the remaining allegations of Paragraph 91. 92. InterDigital denies the allegations of Paragraph 92.

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93.

InterDigital denies that the allegations of Paragraph 93 fairly and

accurately describe the ARIB IPR policy. 94. 95. 96. 97. InterDigital denies the allegations of Paragraph 94. InterDigital denies the allegations of Paragraph 95. InterDigital denies the allegations of Paragraph 96. InterDigital admits that Samsung purports to seek damages in this action;

however, InterDigital denies that Samsung has been damaged or is entitled to recover any damages. Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 97. 98. InterDigital admits that Samsung purports to seek specific performance in

this action; however, InterDigital denies that Samsung is entitled to any such relief. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 98. COUNT IX (Breach of Contract (the ITU IPR Policy)) 99. In response to Paragraph 99, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 100. InterDigital admits that ITU is an SDO. InterDigital lacks knowledge or

information sufficient to form a belief as to the truth of the remainder of the allegations of Paragraph 100 and on that basis denies those allegations. 101. InterDigital admits that InterDigital Communications Corporation is a InterDigital denies that ITC or Tantivy are members of ITU.

member of ITU.

InterDigital lacks knowledge or information sufficient to form a belief as to the truth of the allegation that Samsung is a member of ITU, and on that basis InterDigital denies that allegation. InterDigital denies that the allegations of Paragraph 101 fairly and accurately describe the obligations of members of ITU. Except as thus expressly admitted,

InterDigital denies the allegations of Paragraph 101.

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102.

InterDigital denies that the allegations of Paragraph 102 fairly and

accurately describe the ITU IPR policy. 103. InterDigital also admits that ITC has declared to ITU that, in case part(s)

or all of any proposals contained in contributions submitted by ITC are included in ITUR Recommendation(s) and the included part(s) contain items that have been patented or for which patent applications have been filed and whose use would be required to implement ITU-R Recommendation(s), ITC is prepared to grant a license to an unrestricted number of applicants on a worldwide, non-discriminatory basis and on reasonable terms and conditions in accordance with the Statement on ITU-R Patent Policy (Resolution 1-2, Annex 1). Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 103. 104. 105. 106. InterDigital denies the allegations of Paragraph 104. InterDigital denies the allegations of Paragraph 105. InterDigital admits that Samsung purports to seek damages in this action;

however, InterDigital denies that Samsung has been damaged or is entitled to recover any damages. Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 106. 107. InterDigital admits that Samsung purports to seek specific performance in

this action; however, InterDigital denies that Samsung is entitled to any such relief. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 107. COUNT X (Breach of Contract (the ITU IPR Policy), with Samsung as an Intended, Third-Party Beneficiary) 108. In response to Paragraph 108, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 109. InterDigital denies that the allegations of Paragraph 109 fairly and

accurately describe the obligations of members of ITU. InterDigital further denies the remaining allegations of Paragraph 109.

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110. 111.

InterDigital denies the allegations of Paragraph 110. InterDigital denies that the allegations of Paragraph 111 fairly and

accurately describe the ITU IPR policy. 112. InterDigital also admits that ITC has declared to ITU that, in case part(s)

or all of any proposals contained in contributions submitted by ITC are included in ITUR Recommendation(s) and the included part(s) contain items that have been patented or for which patent applications have been filed and whose use would be required to implement ITU-R Recommendation(s), ITC is prepared to grant a license to an unrestricted number of applicants on a worldwide, non-discriminatory basis and on reasonable terms and conditions in accordance with the Statement on ITU-R Patent Policy (Resolution 1-2, Annex 1). Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 112. 113. 114. 115. InterDigital denies the allegations of Paragraph 113. InterDigital denies the allegations of Paragraph 114. InterDigital admits that Samsung purports to seek damages in this action;

however, InterDigital denies that Samsung has been damaged or is entitled to recover any damages. Except as thus expressly admitted, InterDigital denies the allegations of

Paragraph 115. 116. InterDigital admits that Samsung purports to seek specific performance in

this action; however, InterDigital denies that Samsung is entitled to any such relief. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 116. COUNT XI (Promissory Estoppel) 117. In response to Paragraph 117, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 118. InterDigital admits that ITC has notified ETSI that ITC is the proprietor of

IPRs that ITC believes may be considered essential to the UMTS standard. InterDigital

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also admits that ITC and/or its affiliates have declared to ETSI that they are prepared to grant irrevocable licenses under the IPRs on terms and conditions which are in accordance with Clause 6.1 of the ETSI IPR policy, in respect of the UMTS standard, to the extent that the IPRs remain essential. InterDigital further admits that ITC has

declared to ITU that, in case part(s) or all of any proposals contained in contributions submitted by ITC are included in ITU-R Recommendation(s) and the included part(s) contain items that have been patented or for which patent applications have been filed and whose use would be required to implement ITU-R Recommendation(s), ITC is prepared to grant a license to an unrestricted number of applicants on a worldwide, nondiscriminatory basis and on reasonable terms and conditions in accordance with the Statement on ITU-R Patent Policy (Resolution 1-2, Annex 1). Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 118. 119. 120. 121. 122. 123. 124. InterDigital denies the allegations of Paragraph 119. InterDigital denies the allegations of Paragraph 120. InterDigital denies the allegations of Paragraph 121. InterDigital denies the allegations of Paragraph 122. InterDigital denies the allegations of Paragraph 123. InterDigital admits that Samsung purports to seek specific performance in

this action; however, InterDigital denies that Samsung is entitled to any such relief. Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 124. COUNT XII (Unfair Business Practices) 125. In response to Paragraph 125, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 126. 127. InterDigital denies the allegations of Paragraph 126. InterDigital denies the allegations of Paragraph 127.

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COUNT XIII (Declaration of Unenforceability) 128. In response to Paragraph 128, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 129. InterDigital admits that ITC has notified ETSI that ITC is the proprietor of

IPRs that ITC believes may be considered essential to the UMTS standard. InterDigital also admits that ITC and/or its affiliates have declared to ETSI that they are prepared to grant irrevocable licenses under the IPRs on terms and conditions which are in accordance with Clause 6.1 of the ETSI IPR policy, in respect of the UMTS standard, to the extent that the IPRs remain essential. InterDigital further admits that ITC has

declared to ITU that, in case part(s) or all of any proposals contained in contributions submitted by ITC are included in ITU-R Recommendation(s) and the included part(s) contain items that have been patented or for which patent applications have been filed and whose use would be required to implement ITU-R Recommendation(s), ITC is prepared to grant a license to an unrestricted number of applicants on a worldwide, nondiscriminatory basis and on reasonable terms and conditions in accordance with the Statement on ITU-R Patent Policy (Resolution 1-2, Annex 1). Except as thus expressly admitted, InterDigital denies the allegations of Paragraph 129. 130. 131. InterDigital denies the allegations of Paragraph 130. Paragraph 131 merely recites the relief that Samsung purportedly requests

through this action and, therefore, no response is required. To the extent any response is required, InterDigital denies that Samsung is entitled to any relief. COUNT XIV (Declaration of Express License, Patent Exhaustion and/or Implied License Under Qualcomm-IDC Agreement) 132. In response to Paragraph 132, InterDigital repeats the denials and answers

contained in each of the above paragraphs as if fully set forth herein. 133. In response to Paragraph 133, InterDigital admits that it entered into an

agreement with Qualcomm Incorporated ("Qualcomm"), a nonparty to this action. Due

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to the confidential nature of this agreement, no further response can be made absent an appropriate protective order. 134. InterDigital lacks knowledge or information sufficient to form a belief as

to the truth of the allegations of Paragraph 134 and on that basis denies those allegations. 135. 136. InterDigital denies the allegations of Paragraph 135. Paragraph 136 merely recites the relief that Samsung purportedly requests To the extent that any

through this action and, therefore, no response is required.

response is required, InterDigital denies that Samsung is entitled to any relief. Except as expressly admitted above, InterDigital denies the allegations set forth in the Amended Complaint. AFFIRMATIVE DEFENSES First Affirmative Defense Samsung has failed to state any claim upon which relief can be granted. Second Affirmative Defense Samsung's claims fail, in whole or in part, for lack of consideration. Third Affirmative Defense Samsung's claims are barred, in whole or in part, by the statute of frauds. Fourth Affirmative Defense Samsung's claims are barred because there is no legally cognizable injury. Fifth Affirmative Defense Samsung lacks standing. Sixth Affirmative Defense Samsung's claim under California state law is barred in whole or in part to the extent that it purports to apply to alleged conduct and/or injury occurring outside of California. Seventh Affirmative Defense Samsung's claims are barred in whole or in part by the doctrine of unclean hands.

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Eighth Affirmative Defense Samsung's claims are barred in whole or in part by the doctrine of laches. Ninth Affirmative Defense Samsung's claims are barred, in whole or in part, by Samsung's failure and refusal to negotiate any license in good faith. In this regard, InterDigital has repeatedly made offers to license its 3G patents to Samsung on what InterDigital believes to be FRAND terms and conditions, and has repeatedly invited Samsung to advise InterDigital what it considers to be FRAND terms. Samsung has failed and refused to do so. Based on the foregoing, Samsung has breached its obligation as a putative licensee of 3G patents to negotiate in good faith and consequently is barred from asserting the claims or obtaining the relief set forth in the First Amended Complaint. COUNTERCLAIMS Defendants-Counterclaim Plaintiffs InterDigital Communications, LLC and InterDigital Technology Corporation (collectively, "InterDigital") assert the following counterclaims against Plaintiff-Counterclaim Defendant Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC: 1. InterDigital repeats and incorporates by reference its responses and

allegations as set forth herein in Paragraphs 1-136, above. 2. Defendant-Counterclaim Plaintiff InterDigital Communications, LLC

("IDC LLC") is a Pennsylvania limited liability corporation having its principal place of business at 781 Third Avenue, King of Prussia, Pennsylvania, 19406. InterDigital

Communications is a subsidiary of InterDigital, Inc., a Pennsylvania corporation. 3. Defendant-Counterclaim Plaintiff InterDigital Technology Corporation

("ITC") is a Delaware corporation having its principal place of business at 3411 Silverside Road, Concord Plaza, Suite 105 Hagley Building, Wilmington, Delaware 19810. ITC is a subsidiary of InterDigital, Inc., a Pennsylvania corporation.

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4.

Plaintiff-Counterclaim

Defendant,

Samsung

Electronics

Co.,

Ltd.

("Samsung Electronics"), is a Korean corporation with its principal place of business at 250, 2-Ka, Taepying-Ro, Chung-ku, Seoul, Korea. 5. Counterclaim Defendant, Samsung Electronics America, Inc. ("SEA"), is

a New York corporation, having its principal place of business at 105 Challenger Road, Ridgefield Park, New Jersey 07660. SEA is a wholly owned subsidiary of Samsung Electronics. 6. Counterclaim Defendant, Samsung Telecommunications America, LLC

("STA"), is a Delaware corporation, having its principal place of business at 1301 Lookout Drive, Richardson, Texas 75082. Samsung Electronics. STA is a wholly owned subsidiary of

Upon information and belief, Samsung Telecommunications

America LLP converted to Samsung Telecommunications America, LLC on December 27, 2006. JURISDICTION AND VENUE 7. This Court has subject matter jurisdiction over these counterclaims for

relief pursuant to 28 U.S.C. §§ 1331, 1338(a), and 1367(a), under the Patent Laws of the United States (35 U.S.C. § 1 et seq.). 8. This Court also has personal jurisdiction over Counterclaim Defendant

Samsung Electronics because Samsung Electronics has submitted itself to the jurisdiction of the Court. 9. 1400(b). BACKGROUND 10. United States Patent No. 5,799,010 ("the '010 patent"), entitled "Code Venue is proper in this judicial district under 28 U.S.C. §§ 1391(c)-(d) and

Division Multiple Access (CDMA) Communication System," issued on August 25, 1998, to inventors Gary Lomp, John Kowalski, Fatih Ozluturk, Avi Silverberg, Robert Regis, Michael Luddy, Alexander Marra, and Alexander Jacques. ITC owns by assignment the

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entire right, title, and interest in and to the '010 patent. A true and correct copy of the '010 patent is attached to this Answer and Counterclaims as Exhibit A. 11. United States Patent No. 6,215,778 ("the '778 patent"), entitled "Bearer

Channel Modification System for a Code Division Multiple Access (CDMA) Communication System," issued on April 10, 2001, to inventors Gary Lomp, John Kowalski, Fatih Ozluturk, Avi Silverberg, Robert Regis, Michael Luddy, Alexander Marra, and Alexander Jacques. ITC owns by assignment the entire right, title, and interest in and to the '778 patent. A true and correct copy of the '778 patent is attached to this Answer and Counterclaims as Exhibit B. COUNTERCLAIM I INFRINGEMENT OF U.S. PATENT NO. 5,799,010 12. InterDigital repeats and incorporates each and every allegation of

paragraphs 1 through 11 of these Counterclaims as if fully set forth herein. 13. The '010 patent is presumed to be valid under 35 U.S.C. § 282, and

remains enforceable. 14. On information and belief, Samsung Electronics, SEA, and STA

(collectively "the Samsung Counterclaim Defendants") manufacture, use, import, offer for sale, and/or sell products that infringe the '010 patent, and will continue to do so unless enjoined by the Court. 15. On information and belief, Samsung Counterclaim Defendants

manufacture, import, offer for sale, and/or sell in the United States Third Generation ("3G") CDMA2000 handsets and components thereof that infringe the '010 patent. Samsung Counterclaim Defendants' past and present infringing handsets include, but are not limited to, the following models: SCH-a303 Heat; SCH-a570; SCH-a630; SCHa645; SCH-a850; SCH-a870; SCH-a930; SCH-a950; SCH-a970; SCH-a990; SCH-i730; SCH-i760; SCH-i830 (sometimes referred to as the "IP-830w"); SCH-r200; SCH-r400; SCH-r500 Hue; SCH-r510 Wafer; SCH-u410; SCH-u420; SCH-u470 (sometimes

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referred to as the "Juke"); SCH-u520; SCH-u540; SCH-u620; SCH-u700 (sometimes referred to as the "Gleam"); SCH-u740; SPH-a513 (sometimes referred to as the "Fin"); SPH-a640; SPH-a900; SPH-a920 (sometimes referred to as the "MM-A920"); SPHm500; SPH-m510; SPH-m520; SPH-m610; and SPH-m620 (sometimes referred to as the "UpStage" or "B'Phone"). The identification of these models is not intended to limit the scope of this counterclaim, and remedy should extend to all past and present infringing models. 16. Samsung Counterclaim Defendants know or should have known of

InterDigital's rights in the '010 patent, and their infringement of the '010 patent has been willful and deliberate. 17. As a result of Samsung Counterclaim Defendants' past and continuing

infringement of the '010 patent, InterDigital has suffered and is continuing to suffer irreparable damages in an amount to be determined at trial. COUNTERCLAIM II INFRINGEMENT OF U.S. PATENT NO. 6,215,778 18. InterDigital repeats and incorporates each and every allegation of

paragraphs 1 through 17 of these Counterclaims as if fully set forth herein. 19. The '778 patent is presumed to be valid under 35 U.S.C. § 282, and

remains enforceable. 20. On information and belief, Samsung Counterclaim Defendants

manufacture, use, import, offer for sale, and/or sell products that infringe the '778 patent, and will continue to do so unless enjoined by the Court. 21. On information and belief, Samsung Counterclaim Defendants

manufacture, import, offer for sale, and/or sell in the United States the 3G Wideband Code Division Multiple Access (WCDMA) and CDMA2000 handsets and components thereof that infringe the '778 patent. Samsung Counterclaim Defendants' past and

present infringing handsets include, but are not limited to, the following models: SGH-

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a707 (sometimes referred to as the "Sync"); SGH-a717; SGH-a727; SGH-a737; SGHi607 (sometimes referred to as the "Blackjack"); SGH-zx10; SGH-zx20; SCH-a303 Heat; SCH-a570; SCH-a630; SCH-a645; SCH-a850; SCH-a870; SCH-a930; SCH-a950; SCHa970; SCH-a990; SCH-i730; SCH-i760; SCH-i830 (sometimes referred to as the "IP830w"); SCH-r200; SCH-r400; SCH-r500 Hue; SCH-r510 Wafer; SCH-u410; SCHu420; SCH-u470 (sometimes referred to as the "Juke"); SCH-u520; SCH-u540; SCHu620; SCH-u700 (sometimes referred to as the "Gleam"); SCH-u740; SPH-a513 (sometimes referred to as the "Fin"); SPH-a640; SPH-a900; SPH-a920 (sometimes referred to as the "MM-A920"); SPH-m500; SPH-m510; SPH-m520; SPH-m610; and SPH-m620 (sometimes referred to as the "UpStage" or "B'Phone"). The identification of these models is not intended to limit the scope of this counterclaim, and remedy should extend to all past and present infringing models. 22. Samsung Counterclaim Defendants know or should have known of

InterDigital's rights in the '778 patent, and their infringement of the '778 patent has been willful and deliberate. 23. As a result of Samsung Counterclaim Defendants' past and continuing

infringement of the '778 patent, InterDigital has suffered and is continuing to suffer irreparable damages in an amount to be determined at trial. PRAYER FOR RELIEF WHEREFORE, Defendants InterDigital Communications, LLC, InterDigital Technology Corporation, and Tantivy Communications, Inc. ("InterDigital") pray judgment as follows: 1. 2. 3. 4. That Samsung take nothing by reason of its complaint; That judgment be rendered in favor of InterDigital; That InterDigital be awarded its costs of suit incurred in this action; and That, for the reasons set forth in InterDigital's Counterclaims, this Court

enter judgment in its favor and against Samsung Counterclaim Defendants as follows:

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(a)

Find that Samsung Counterclaim Defendants have infringed one or

more claims of the '010 patent and the '778 patent; (b) (c) Find that this is an exceptional case under 35 U.S.C. § 285; Enter an injunction and permanently enjoin Samsung Counterclaim

Defendants from infringing the claims of the '010 patent and the '778 patent under 35 U.S.C. § 283; (d) Award InterDigital an amount to be determined as compensatory

damages for Samsung Counterclaim Defendants' infringement of the '010 patent and the '778 patent and the costs of this action as determined by the Court under 35 U.S.C. § 284; (e) Treble the damages as a result of Samsung Counterclaim

Defendants' willful infringement of the '010 patent and the '778 patent under 35 U.S.C. § 284; (f) Award InterDigital its costs, including expenses and reasonable

attorney fees incurred in litigating this action under 35 U.S.C. § 285; (g) Award InterDigital pre-judgment and post-judgment interest on all

amounts awarded; and (h) Award InterDigital any further relief that this Court deems proper. JURY DEMAND InterDigital demands a jury trial as to all issues that are triable by a jury in this action.

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OF COUNSEL: Mark D. Flanagan Nathan Walker WILMER CUTLER PICKERING HALE AND DORR LLP 1117 California Avenue Palo Alto, CA 94304 Telephone: (650) 858-6000 Telecopier: (650) 858-6100 [email protected] [email protected]

By:

/s/ Richard K. Herrmann _ Richard K. Herrmann#405 MORRIS JAMES LLP 500 Delaware Avenue, Suite 1500 Wilmington, DE 19801-1494 Telephone: (302) 888-6800 Telecopier: (302) 571-1750 [email protected]

OF COUNSEL: Patrick J. Coyne Christopher P. Isaac FINNEGAN HENDERSON FARABOW GARRETT & DUNNER LLP 901 New York Avenue, NW Washington, DC 20001-4413 Telephone: (202) 408.4000 Telecopier: (202) 408.4400 Attorneys for Defendants InterDigital Communications, LLC, InterDigital Technology Corporation, and Tantivy Communications, Inc.

Ron E. Shulman Michael B. Levin WILSON SONSINI GOODRICH AND ROSATI LLP 650 Page Mill Road Palo Alto, CA 94304 Telephone: (650) 493-9300 Telecopier: (650) 493-6811 [email protected] [email protected]

Dated: November 19, 2007

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