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Re: tradeawait post# 1782

Friday, 10/28/2011 6:39:32 AM

Friday, October 28, 2011 6:39:32 AM

Post# of 12829
Here is the full USITC text of the delay of 377-TA-703 (Kodak vs Apple) to 30 DEC, 2011. New ALJ is Thomas B. Pender.

USITC 377-TA-703 delayed after close yesterday to DEC 2011

It was not there yesterday evening after close, neither was the link with the overview updated with the December date (I check both specifically, it must have happened later in US Easter time according the time-stamp of your post) so USITC didn't communicate about this specific case (maybe they have a backlog). Such a last minute (literally) change of day is quite unusual given there are no petitions from involved parties.

Also Apple/Rimm/Kodak did NOT communicate about this (Apple almost never does) while all must have known since 14 OCT 2011 that the date was delayed to DEC 30, 2011.


On August 18, 2011, the Acting Chief ALJ extended the target date by two months to permit reassignment to a new ALJ, and on August 30, 2011, the Commission determined not to review that extension.

On October 14, 2011, the Acting Chief ALJ issued the subject ID (Order No. 32), which extended the target date by two months to December 30, 2011, in order to allow “the Investigation to be permanently reassigned,” and to provide “the new ALJ an opportunity to determine time needed to complete the remand proceeding.” Order No. 32 at 1. On October 24, 2011, the investigation was reassigned to Judge Thomas B. Pender.

No petitions for review of the ID were filed. The Commission has determined not to review the ID.



What does this mean!

- Kodak knew the case was delayed to DEC when they communicated their next weeks AM meeting date, that means they KNEW there was not going to be a know verdict to be announced.

- No petitions means the new ALJ will judge on the file at hand (no new hearings, etc) and this file at hand contain for 100% sure infringement established by the full USITC commission.

On June 30, 2011, the Commission issued a notice that determined to affirm in part, reverse in part, and remand in part, the final ID.



- Since no hearings and further petitions are possible the ALJ does NOT have to wait until DEC 30, 2011 to rule and may rule any day. If in other cases petitions and hearings are still to come then the 377-TA-703 may come out early because that one is ready to rule now.
That does make the EXACT date unpredictable (hint, hint, hint) and that is catastrophic for all naked shorters as well as for some option strategies where speculators will have to put their necks out (certain securities have been taken away). In a normal market we should see the pps go up now.

Technically Kodak has won this case because the new ALJ will not reverse the full commissions infringement statement because if he does the files goes back to the full commission anyway on request of Kodak. Another reason to see the pps go up because having Kodak on the shelf is now subject of two news events which both should be positive. A good verdict and bids on the patent portfolio as a whole.

I would not be surprised we are going to see a settlement (smart move by Apple) because then if they loose the bid of the patent portfolio they are out of reach of Google and if they win they pay lic. to themselves. In other words Apple can reduce it's bid (accounting wise) by the licenses it pays for settlement and increase the current revenue of lic. over that portfolio by what RIMM will pay.

Since Kodak isn't stupid either they will raise the lic. knowing the strategic importance and value of the portfolio and given the warnings by several parties not to sell/lic. under value. For Apple this is no big deal provided they win the bid. For Rimm it is an unpleasant surprise. For the other bidders it's a financial bonus on top of the lic. that the portfolio already brings in but it diminishes the strategic swap/negotiation value of the portfolio for the Android club versus Apple and/or Microsoft.

This would mean Kodak comes in a position where it could raise the lic so high that they don't even have to sell there patent portfolio anymore (which they will do anyway because they don't need it anymore). That would make Microsoft the number one interested party (over the Android club) because for Microsoft having the portfolio means income over time higher then the price they pay (=profit) and no risk that the portfolio comes in the wrong hands (Apple or Google from their perspective because both do not like Windows 8 based devices (Phones/Tablets) to come). Microsoft would immediately have change coin for ALL Android players because these, with the exception of APPLE/RIMM who have their own operating system, are the once paying licenses for the Kodak patent. This scenario would be favorable for Nokia (that will probably join Microsoft) because it's competition (Android devices) would not have free operating systems anymore.

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