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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
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                                    FORM 8-K

                                 CURRENT REPORT

                        PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

       DATE OF REPORT (Date of earliest event reported): January 20, 2006
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                     InterDigital Communications Corporation
             (Exact name of registrant as specified in its charter)


         Pennsylvania                1-11152                    23-1882087
(State or other jurisdiction  (Commission File Number)        (IRS Employer
       of incorporation)                                    Identification No.)


781 Third Avenue, King of Prussia, Pennsylvania                 19406-1409
  (Address of Principal Executive Offices)                      (Zip Code)


        Registrant's telephone number, including area code: 610-878-7800


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

|_|  Written communications pursuant to Rule 425 under the Securities Act (17
     CFR 230.425)

|_|  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
     240.14a-12)

|_|  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

|_|  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01  Entry into a Material Definitive Agreement.
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     On January 20, 2006, the  Compensation  Committee of the Board of Directors
(the  Compensation  Committee) of InterDigital  Communications  Corporation (the
Company),  after reviewing the Company's performance against the pre-established
targets,   authorized  the  payment  of  long-term   incentive   awards  to  all
participants  in the first  cycle  (Cycle 1) of the cash  award  portion  of the
Company's Long Term  Compensation  Program (LTCP).  The  Compensation  Committee
approved the following  long-term cash awards for the Company's  Chief Executive
Officer and the four other most  highly  compensated  executive  officers in the
Company's last completed fiscal year (Named Executive Officers), as follows:

     Mr. William J. Merritt, Chief Executive Officer                   $ 232,171
     Mr. Richard J. Fagan, Chief Financial Officer                     $ 162,360
     Mr. Mark A. Lemmo, Senior Business Development Officer            $ 161,745
     Mr. Lawrence F. Shay, General Counsel                             $ 129,560
     Mr. William C. Miller, Senior Engineering and Programs Officer    $ 112,476


Item 2.02  Results of Operations and Financial Condition.
- ---------  ----------------------------------------------

     In its Form 8-K dated  January 23, 2006,  the Company  reported that it had
signed a patent license agreement  (Agreement) with LG Electronics Inc. covering
certain mobile handset and infrastructure products. The signing of the Agreement
affects a number of items in the Company's financial  statements for both fourth
quarter 2005 and 2006.  These items include revenue  recognition  related to the
Agreement  beginning  in 2006,  expense  associated  with the  performance-based
element of the Company's long-term compensation plan in fourth quarter 2005, and
the  valuation  of the  Company's  deferred  tax assets as of December 31, 2005.
Those items are discussed below.

     Further,  the Company  anticipates receipt of the first $95 million payment
in accordance with the Agreement (net of any source  withholding tax and related
commissions) in first quarter 2006. In addition,  the Company has received a $15
million   royalty   prepayment   in  first   quarter   2006  from  an   existing
Taiwanese-based licensee which has exhausted its previous prepayment.

Revenue Recognition Related to Agreement
- ----------------------------------------

     The  Company  has  not  finalized  the  manner  in  which  revenue  will be
recognized  for the Agreement  beginning in 2006,  but will provide  appropriate
guidance in a future filing with the Securities and Exchange Commission (SEC).

Performance-Based Compensation Expenses
- ---------------------------------------

     As part of its  compensation  programs,  the  Company  employs  a LTCP that
provides performance-based cash compensation to the Named Executive Officers and
other managerial level employees if certain pre-established targets are achieved
during the program period.  The targets are designed to drive achievement of the
Company's strategic plan and to enhance shareholder value.

     Due to the Company's achievement of pre-established targets associated with
the performance-based  cash incentive component of the LTCP for the period April
1, 2004  through  January 1, 2006  (Cycle 1),  the  Company  expects to record a
cumulative  adjustment of approximately $3.4 million in additional  compensation


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expense in fourth quarter 2005 based on better-than-anticipated  performance. In
second quarter 2005, the Company  adjusted its assessment of progress toward the
achievement of targets under the program,  recording a cumulative  adjustment of
approximately  $1.6 million to reduce previously accrued expense associated with
Cycle 1. This adjustment  reflected an expected payout of 50% of the LTCP target
compensation.  Based on its  assessment in the third  quarter 2005,  the Company
continued to accrue expense at an anticipated 50% LTCP payout.  However,  during
the latter  portion  of 2005 the  Company  significantly  exceeded  its  revised
expectations  and achieved 101% of the goals for Cycle 1,  resulting in a payout
of 102.5% of target. Based on the better-than-projected  achievement levels, the
Company expects to record the $3.4 cumulative charge noted above, reflecting the
difference between the earlier accrued amount and the actual payout amount.

Valuation of Deferred Tax Assets
- --------------------------------

     After giving  consideration  to both the Agreement and its recent operating
performance,  the  Company  believes  it is more  likely  than  not that it will
generate  future  taxable  income  sufficient  to utilize a large portion of its
deferred tax assets. As a result, the Company expects to reverse the majority of
the  remaining  valuation  allowance  against its  deferred tax assets in fourth
quarter  2005,  portions of the  valuation  allowance  reversal will be credited
directly to  additional  paid-in-capital  and a portion  will be  recognized  as
income in the statement of operations.

     At  December  31,  2004,   the  Company  held  a  valuation   allowance  of
approximately  $75.2  million  against its deferred tax assets of  approximately
$107.6  million.  The Company  will  provide the exact  amount of the  valuation
allowance reversal in a future filing with the SEC.


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                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.


                                        INTERDIGITAL COMMUNICATIONS CORPORATION


                                        By: /s/ R.J. Fagan
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                                             Richard J. Fagan
                                             Chief Financial Officer

Date:    January 26, 2006


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