Nokia signed a technology development and patent license agreement with Interdigital in February 1999, paying $31.5 million up front to cover royalties for product sales through the end of 2001. The mobile phone market has grown a wee bit since then.

Royalties owed after 2001 were to have been defined through direct negotiation, or by example from a license agreement with a designated major competitor, commonly referred to in the business as a Most Favored Licensee clause. Ericsson and Sony Ericsson signed a licensing agreement with Interdigital in March 2003 for 2G and 2.5G handset and infrastructure sales (the current GSM and GPRS standards). Based on this deal, InterDigital notified Nokia of its royalty payment obligations. Nokia disagreed, requesting binding arbitration in July 2003 to resolve the dispute. The June 2005 arbitration court ruling set the stage for Nokia's appeal to the court, which it just lost.

Nokia spokeswoman Riitta Mard remarked, "The parties are continuing discussions on how to apply the decision."

InterDigital, founded in 1972, and based in King of Prussia, Pennsylvania, has over 1,000 patents related to wireless telecommunications. It has been estimated that up to three-quarters of the world’s GSM phones use technology based on InterDigital’s designs.