InterDigital patents not violated by two phone makers: judge

WASHINGTON (Reuters) - Handsets made by ZTE Corp and Nokia, now owned by Microsoft Corp, do not violate InterDigital Inc's patents for wireless phones, a U.S. International Trade Commission judge said in a preliminary ruling released on Friday.

The full commission is expected to issue a final ruling in October.

InterDigital shares plunged more than 10 percent on the ruling, and but they recovered somewhat and were down about 7.3 percent in late-afternoon U.S. trading.

InterDigital said in a statement that it would appeal to the full commission, and potentially to the U.S. Court of Appeals for the Federal Circuit.

"Today's decision by the administrative law judge is unfortunate, and does not align with the validation of our portfolio and licensing practices that is reflected in our numerous agreements with major wireless companies worldwide," the company said in a statement.

Initially, Wilmington, Delaware-based InterDigital had also sued Samsung Electronics and Huawei for infringement but these two companies opted to settle.

It had accused the companies of infringing on seven patents when the case was filed in 2013, but four dropped out in the course of litigation.

Originally, InterDigital had sued Nokia, which sold its handset business to Microsoft during the course of litigation. That deal closed in April 2014.

Microsoft had no comment on the case, while ZTE did not respond to requests for comment.

The ITC is a popular venue for patent lawsuits because it can ban products that infringe on patents from being imported into the United States more easily than district courts can.

The case at the International Trade Commission is InterDigital Communications v. Nokia Corp and ZTE Corp and is No. 337-868.

(Reporting by Diane Bartz; Editing by Ros Krasny, Chris Reese and Peter Galloway)