InterDigital Announces Third Quarter 2008 Financial Results (Revenue down 2%)

Excluding a $3.9 million reduction in 2008 to adjust a Nokia-related litigation contingency and a $16.6 million charge in first nine months 2007 related to the Federal arbitration award, operating expenses for first nine months 2008 of $141.9 million increased $4.9 million compared to the first nine months 2007. This increase primarily resulted from investment in the development of our SlimChip product. While patent litigation and arbitration costs of $32.2 million in first nine months 2008 increased $4.5 million year-over-year, the increase was more than offset by a $5.2 million increase in related insurance reimbursements.

Net interest and investment income of $2.8 million in first nine months 2008 decreased $4.2 million from $7.0 million in first nine months 2007 driven by a $0.7 million write-down of an investment in first nine months 2008, lower rates of return, and lower investment balances in first nine months 2008 as compared to 2007.

The companys effective tax rate was 35% for first nine months 2008. Tax expense for first nine months 2007 consisted of a 33% provision for federal income taxes, which reflected a research and development credit.

During first nine months 2008, the company generated $77.2 million of free cash flow1 compared to $85.4 million in 2007. First nine months 2008 free cash flow was driven by receipts from patent licensing agreements totaling $257.7 million, offset in part by cash-based operating expenses, capital investments and changes in working capital.

Fourth Quarter 2008

Scott McQuilkin, Chief Financial Officer commented, We continue to be optimistic about the fundamental growth prospects for the 3G handset market, which bodes well for our business model. While the weakening global economic conditions may continue to put pressure in the near-term on royalties from those licensees with per-unit contracts, our mix of fixed and per unit agreements also provides stability in times such as these. More importantly, we remain confident in our ability to successfully add substantial new licensees, which could significantly increase our royalty revenues.

As for the fourth quarter, we will provide an update on our revenue expectations after we receive and review the applicable patent license and product sales royalty reports and update our forecasts on anticipated revenue from work associated with technology solutions agreements. At this point, we are very encouraged by strong sales of our licensees products containing our SlimChip modem IP, concluded Mr. McQuilkin.

About InterDigital®

InterDigital designs, develops and provides advanced wireless technologies and products that drive voice and data communications. InterDigital is a leading contributor to the global wireless standards and holds a strong portfolio of patented technologies, which it licenses to manufacturers of 2G, 2.5G, 3G and 802 products worldwide. Additionally, the company offers a family of SlimChip high performance mobile broadband modem solutions, consisting of Baseband ICs, Modem IP and Reference Platforms. InterDigitals differentiated technology and product solutions deliver time-to-market, performance and cost benefits. For more information, please visit InterDigitals web site:

This press release contains forward-looking statements regarding our current beliefs, plans, and expectations with respect to: (i) the continued growth of our patent licensing program; (ii) the outcome of the USITC actions against Samsung and Nokia; (iii) fourth quarter 2008 revenue guidance; and (iv) the strategic direction of the companys SlimChip product business. Words such as continue to, will, bodes, may, could, expect, or similar expressions are intended to identify such forward-looking statements.

Forward-looking statements are subject to risks and uncertainties. Actual outcomes could differ materially from those expressed in or anticipated by such forward-looking statements due to a variety of factors including, but not limited to, those identified in this press release as well as the following: (i) unanticipated delays, difficulties or acceleration in the execution of patent license agreements; (ii) our ability to leverage our strategic relationships and secure new patent licensing and technology solutions agreements on acceptable terms; (iii) unanticipated delays or difficulties in our technology development efforts, testing and evaluations, and our reliance upon third parties for infrastructure equipment; (iv) changes in the market share and sales performance of our primary licensees, delays in product shipments of our licensees and timely receipt and final reviews of quarterly royalty reports from our licensees and related matters; (v) unanticipated product development expenses and other unanticipated operational costs and the timing of such expenses and costs; (vi) changes in technology preferences, needs, availability, pricing and features of competitive technologies and product offerings; (vii) the resolution of current legal proceedings, including any awards or judgments relating to such proceedings, additional legal proceedings, changes in the schedules or costs associated with legal proceedings or adverse rulings in such legal proceedings; and (viii) changes in our expectations for the amount and composition of full-year taxable income, changes in the amounts of our 2008 U.S. federal research and experimental credit and foreign tax credits, changes in foreign and domestic tax laws or treatises, or changes in our tax planning strategies. We undertake no duty to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.

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