Former Nokia and InterDigital big hitter Eeva Hakoranta explains how arbitration can produce genuine win-wins in major bilateral deals

In July, InterDigital and Samsung announced the outcome of an arbitration process to set the final terms for the renewal of a patent licensing agreement that had expired at the end of 2022. Under the agreement, Samsung is to pay over $1 billion in patent royalties for a period spanning 1st January 2023 to 31st December 2030.

Eeva Hakoranta was InterDigital’s Chief Licensing Officer until May 2025 and was closely involved in the negotiation process with Samsung. We invited her to share her arbitration experience and her views on dispute resolution more widely.

What can you tell us about how the InterDigital/Samsung arbitration came about and your role in it?

I started at InterDigital in July 2020 with Bill Merritt as the CEO. I joined Bill’s executive team and assumed responsibility for all the company’s licensing activities. There was a lot of work to be done and I started working on the two major renewal projects, Apple and Samsung, with my team pretty much immediately.

There was never a question of whether Samsung would take a licence from InterDigital. However, Samsung is a very sophisticated party and knows what it wants and needs out of a negotiation.

I was not there when the previous licence – a 10-year deal, one of the longest in InterDigital’s history – had been negotiated, but my impression was that Samsung had achieved a very attractive deal, which made the renewal discussion relatively challenging.

We were able to start our discussion before the expiry of the deal. During this time, we had announced our amicably closed deal with Apple which provided us with annual recurring revenue at the level of $134 million. Hence, we focused our efforts on the next best solution, which was agreeing to arbitration.

How did the agreement to arbitrate benefit each of the parties?

Samsung is a sophisticated party that has plenty of experience of arbitration, hence this was an agreeable option for them as well. The remaining issues between the parties, including the payment, were referred to arbitration. The press announcement went out stating that a renewal of a licence was in place and Samsung would not experience any disruption to its business. InterDigital was able to recognise revenue according to relevant accounting rules and was able to let the market know that it had renewed its licence with its long-time customer.

How did the arbitration process itself go?

The arbitration itself was a major enforcement exercise which required a lot of resources both from the licensing team and the litigation team as well as fact witnesses and experts. We put together a top-notch cross-functional team and got to work – and had a lot of fun along the way.

A large project like this involves a host of different disciplines and economic expert testimony is crucially central. One aspect I personally believe is fundamentally important is having an in-house economist work with the external experts to ensure nothing gets ‘lost in translation’.

The licensing team, including myself, worked alongside everyone else throughout the roughly two-year process. The main hearing took place in July 2024 – and I travelled to New York to the hearing instead of organising a big birthday party for a very important birthday of mine – which I will absolutely have to make up for in the coming summers!

After the hearings were done it took a while for the award to issue.

What do you make of the outcome, and the reactions it has generated?

I believe it was a fair, reasonable and non-discriminatory outcome. To me it appears well grounded with the closest comparable agreement. Samsung and InterDigital are parties who are in this industry for the long term. They found a good and mutually beneficial process to resolve a gap which they at the time could not close by bilateral negotiation.

People are often very quick to express their views without having much context – without going to any confidential detail, I would say there is a lot of context here and the importance of comparable agreements is highlighted in the result. You can also expect that both parties had great arguments and great experts, fact witnesses and external lawyers – and the tribunal was very competent and diligent. In my humble view, this process was far more reliable than what I have observed recently from the UK High Court, for example.

Some people have characterised this outcome as a loss for Samsung. I would disagree and point out that Samsung was a willing licensee that took the opportunity to minimise its transaction costs through a process that brings about a final decision in roughly two years, while in the meantime allowing the company to continue to advocate for its preferred royalty level while enjoying the protection of a full licence. They used their full discretion to negotiate the terms of the licence and I am sure made appropriate provisions in their finances to prepare for the result.

I have huge respect for Samsung – we have often disagreed at the negotiation table and in arbitration – but if you have a decent portfolio they believe they need to license, there is always a licence agreed, ultimately. Other licensees should take note of this. Hats off to Samsung!

Some have said that the large headline figure recently announced by InterDigital and Samsung may make implementers less likely to agree to future arbitrations. Do you agree?

I am hoping this is not the case but I do understand the argument – big numbers attract attention. Everyone should remember that Samsung and Apple are very big global companies competing with each other. The headline figure needs to be put in context: a market leader obtains a very long term licence which provides business continuity until the next decade.

How would you advise an IP team to sell arbitration to management that may lack experience or have reservations about it?

My pitch is that if you find yourself in a situation where the bilateral negotiation gets stuck because of a financial gap, or someone having an inflexible position on relevant contract interpretation or other aspects, think about your options.

If your priority is providing your business with a licence and the least possible disruption, arbitration is a very attractive option because it is a dispute resolution method which allows for a licence to be put in place while the price is being “negotiated” in the arbitration procedure.

You can put forward all your arguments in arbitration and you will have access to comparables. You will focus on one single proceeding instead of a disruptive global litigation campaign which most likely requires much more of your attention, coordination of multiple external legal advisers and is far more costly. And your business continues uninterrupted while arbitration is pending – because a licence is in place.

The reason companies dislike arbitration is in my view that they find holding out an attractive business model and do not want to commit to taking a licence. This is why I firmly believe the UK courts are currently applying double standards by being very willing to declare patent holders unwilling licensors unless they agree to interim licences put in place by the UK courts – but they seem to refuse to draw similar inferences about licensees not agreeing to arbitration!

Arbitration is often criticised for producing a non-public outcome. Do you think it would be better for the FRAND world as a whole if more arbitration results were announced like this one? What are the barriers to this happening?

The parties can decide to publish an arbitration result, but in the end many parties do not. I actually do not think full transparency on all agreements would assist getting licensing deals done.

Let’s take a step back and consider why the FRAND world would need to know every outcome of a bilateral negotiation. This is a business-to-business transaction and I do not think price transparency in that sense is present in many B2B industries. Professionals who intend to get deals done can do their due diligence and discover the range of acceptable outcomes, just as in other industries.

Transparency has become a narrative which resonates with policymakers, but we should be careful with our definitions – it can mean different things to different people. There is, in fact, a lot of transparency in the SEP world, especially with cellular standards. Now, why does everyone need to know what everyone else pays, unless they are striving toward a “most favoured nation” (MFN) result?

It has been made abundantly clear by various adjudicators that FRAND does not mean MFN – yet most proponents for transparency use this narrative precisely for advocating for MFN. The ND part of FRAND means that you should not treat similarly situated parties in a discriminatory manner. It does not mean that everybody is entitled to the lowest price you have ever offered a licence for – yet, according to my experience in both negotiation tables and court rooms, that is what the transparency advocates usually try to achieve.

What are the main benefits of arbitration, weighed against litigation?

Arbitration has many benefits when weighed against litigation.

• The biggest benefit is that unlike litigation in a national court, agreeing to arbitration completes a licence and there is minimal business disruption.

• The New York Convention provides for enforceability of arbitral awards internationally. Arbitration is the only dispute resolution mechanism which has international reach and provides a binding commitment by the licensee and a licence pending dispute.

• Being an international dispute resolution mechanism, arbitration does not create the tension between various national jurisdictions we have experienced in some high-profile SEP litigations. It also will not generate different and inconsistent outcomes which the parties cannot reconcile in their final agreement.

• Arbitration is far more cost effective than a multi-jurisdictional litigation campaign which is usually the alternative to arbitration – you can focus on one single proceeding and make sure your arguments are presented in the best possible manner.

• Arbitration is usually also much more expedient than a multi-jurisdictional litigation which can take years of appeals in various courts. My rule of thumb is that an arbitration takes roughly two years to conclude.

Finally, international arbitrators are used to resolving complex business-to-business disputes and a panel of three senior arbitrators allows for quality deliberations among the tribunal. Quite often tribunals also have access to quality administrative assistance, for instance through their law firms. My experience regarding quality of the decisions and reasoning in arbitration is relatively good. I am certain every judge in a national jurisdiction also strives for great decision quality, but a large FRAND determination can have a massive amount of material and a single judge may struggle with mastering all of it.

What does a good arbitration process look like?

There are best practices for everyone involved to make the arbitration process as efficient and effective as possible:

• The parties narrow down the dispute and agree on as much as they can – this allows for greater focus and resolution orientation to begin with.

• External advisors to the parties maintain a dialogue to assist in the tribunal’s task – hopefully agreeing on much of it.

• The tribunal allows time for the parties to present their case but makes sure the agreed upon schedule and terms of reference are respected

• The procedures include written preparation, oral hearings with witnesses and expert testimony, with time equally divided between the parties

• Tribunal members come to hearings well prepared and participate with clarifying questions.

Do you see any potential for industry consensus around an arbitration protocol for FRAND licensing that displaces much of the multinational litigation we see today? What are the barriers to this happening?

I believe this could happen provided national courts are willing to draw inferences from parties not agreeing to arbitrate. If this does not happen, it seems to me that those who opt for hold-out will keep doing so instead of having an arbitration practice develop. Arbitration requires agreement by both parties – there must be incentives for both parties to agree to it.

Is arbitration mainly useful for bilateral disputes with heavyweights on both sides of the table? Can it have any role in contexts like IoT with larger numbers of lower-value disputes?

I could see arbitration used in smaller disputes as well – especially where parties are solution oriented and seek a resolution. In such cases, however, mediation can also be a good form of alternative dispute resolution. There are, for instance, various institutional arbitration venues which offer expedited procedures. Needless to say, should a specific arbitration protocol start developing for FRAND cases, it would also make sense to develop a solution for expedited procedures for smaller value cases.

Eeva Hakoranta is Founder and CEO of Aligning Stars. She served as Chief Licensing Officer at InterDigital from 2020-2025 and prior to that was Senior Vice President and Head of Intellectual Property at Nokia

The opinions expressed within this article are her own and do not necessarily reflect the views of Sisvel. The content is for informational purposes and should not be taken as legal advice.