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Monterey2000, that is not correct. $98M was recognized in the first quarter. The remaining $87M will be recognized after the appeals.
Am I correct that Lenovo's $184.9 million will all be recognized in 2nd Q 2023 financials? Any future Lenovo settlement revenue will await the completion of the appeal of the recent Lenovo decision.
InterDigital Announces Date for Second Quarter 2023 Financial Results
Company Release - 7/18/2023
WILMINGTON, Del., July 18, 2023 (GLOBE NEWSWIRE) -- InterDigital, Inc. (Nasdaq: IDCC), a mobile and video technology research and development company, today announced that the company will release its second quarter 2023 financial results before market open on Thursday, August 3, 2023.
InterDigital executives will host a conference call that same day at 10:00 a.m. Eastern Time (ET) to discuss the company's performance.
For a live Internet webcast of the conference call, visit www.interdigital.com and click on the “Webcast” link on the Investors page. The company encourages participants to take advantage of the Internet option.
For telephone access to the conference call, visit www.interdigital.com and click on the “Dial In Registration” link on the Investors page. Registration is necessary to obtain a dial in phone number and PIN to join.
An Internet replay of the conference call will be available on InterDigital’s website under Events in the Investors section. The replay will be available for one year.
Wall Street Bulls Look Optimistic About InterDigital (IDCC): Should You Buy?
IDCC
+0.29%
Zacks Equity Research
Mon, July 17, 2023 at 8:30 AM CDT
In this article:
IDCC
+0.29%
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Let's take a look at what these Wall Street heavyweights have to say about InterDigital (IDCC) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
InterDigital currently has an average brokerage recommendation (ABR) of 1.00, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by three brokerage firms. An ABR of 1.00 indicates Strong Buy.
Of the three recommendations that derive the current ABR, three are Strong Buy, representing 100% of all recommendations.
Brokerage Recommendation Trends for IDCC
Broker Rating Breakdown Chart for IDCC
Broker Rating Breakdown Chart for IDCC
Check price target & stock forecast for InterDigital here>>>
While the ABR calls for buying InterDigital, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near -term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks Rank
In spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is IDCC a Good Investment?
Looking at the earnings estimate revisions for InterDigital, the Zacks Consensus Estimate for the current year has increased 0.1% over the past month to $8.08.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for InterDigital. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for InterDigital may serve as a useful guide for investors.
The company just received another nearly $7 per share of cash, presumably the minimum they will receive from Lenovo. Maybe the company’s board of directors can find a way to bump the dividend payout to owners by a penny per quarter, just so they can say they raised the dividend that has been the same nearly forever.
Item 8.01.
Other Events.
On July 11, 2023, InterDigital, Inc. (the “Company”) received a cash payment in the amount of $184.9 million related to its UK High Court case against Lenovo equal to the amount the court ordered Lenovo to pay for a license through 2023. At this time the Company expects to defer recognizing any additional catch-up revenue until the appeal process progresses.
I have been lurking here almost as long as Loop and accumulated many shares. The end game and strategies have consumed a great deal of thought as I have gotten older.
When we hit $75 a few months ago I decided to sell 1000 shares then and whenever it reached another $5 increment so I’ve peeled off 4000 shares thus far this year. I have been very overweighted with this security and this allows me to re-allocate while not sacrificing the potential I still see for further appreciation.
I’ve got enough remaining shares to see me through $200 and am very comfortable waiting.
Hope this offers a different perspective.
I believe the "shorts", call sellers, etc were caught off guard yesterday, and needed to throw a lot of water on IDCC today.
Looks like the shorts are getting some relief today on above average volume.
a savvy old trader told me...its the situations where stuff is easy to borrow....that tend to put the shorts in worst places..
teecee56, An hour ago the shares available to borrow went up 300K. I am guessing that with our volume today someone reached MAX pain...
Hey guys!!!!
Great to see!!
What price targets do you realistically have in mind before end game (when u sell)
It’s been a long journey
vegas...they may not be at max pain...but they sure as heck are in the meat grinder
The most interesting take away from the short interest is that the shorts have not met max pain as they are not covering...
$100 OREENOS in pre market! Just 1 share though…
IDCC short interest down 12K to 3.073M.
InterDigital named one of the Top 100 leaders in sustainable innovation
Company Release - 7/12/2023
WILMINGTON, Del., July 12, 2023 (GLOBE NEWSWIRE) -- InterDigital, Inc. (Nasdaq: IDCC), a mobile and video technology research and development company, has been named one of the leading companies in innovation that advances sustainability in a new report from LexisNexis.
The report, Exploring the Global Sustainable Innovation Landscape: The Top 100 Companies and Beyond, analyzes companies’ patent portfolios and measures their contributions in helping to achieve the United Nations’ Sustainable Development Goals. Specifically, the report reveals which companies “have the largest share of overall innovative strength in sustainable technologies and which are innovating on sustainable technologies in specific industries.”
“As an innovation business we know that technology has the power to change the world around us,” said Liren Chen, CEO and President, InterDigital. “Our foundational work in wireless, video, AI and other technologies is helping to drive a new era in connectivity, and I am proud that this work is also guiding us towards a more sustainable future.”
To download the report, visit Exploring the Global Sustainable Innovation Landscape (lexisnexisip.com).
New SA article
maybe that's the problem with quants
https://seekingalpha.com/article/4616275-interdigital-stock-risk-reward-balance-no-longer-makes-sense?mailingid=32041571&messageid=2800&serial=32041571.1525&utm_campaign=rta-stock-article&utm_medium=email&utm_source=seeking_alpha&utm_term=32041571.1525
Paullee review your prior June 30th post. Based on that post I don’t think any trial is going to happen in Delaware or Pennsylvania.
Does a new trial start in Delaware today?
Congratulations to IDCC'er. I am out of IDCC, but always wish the best to diligent investors over here. So happy for you! Dont know much about IDCC businesses anymore, it would be prudent for some of the old timers taking steps to alleviate rough time ahead.
Per Bloomberg
target prices
Roth 114.00
Jeffereies 106.00
BoA/ML 105.00
Zachs 105.00
Sidoti 112.00
Paullee - thank you for posting the Roth investment research, much appreciated.
Still more upside to InterDigital, says Roth
The stock has been on an incredible run this year, but Roth Capital Partners analyst Scott W. Searle sees more upside to wireless patents company InterDigital (InterDigital Stock Quote, Charts, News, Analysts, Financials NASDAQ:IDCC). Searle delivered an update on Thursday, saying the company has a clear path to earnings growth over the next few years, with lots of potential in the video streaming sector.
Last week, Roth Capital hosted a call with Interdigital President and CEO Liren Chen to talk about progress in the business, where the company had a successful UK High Court outcome with Lenovo, while its Samsung arbitration continues in line with prior disclosed timelines and parameters and its CE video IP monetization continues to build momentum.
“With multiple technologies feeding this opportunity (largely video codecs/compression IP buffeted by WiFi and core cellular solutions), we expect CE momentum to continue into key segments such as TVs/monitors, laptops, etc., comprising over a 400 million annual unit opportunity,” Searle wrote.
On IDCC’s IP video, Searle called it a key enabler but one which has yet to be monetized in the currently $300-$400 billion market (and en route to $500 billion by 2026). Searle said the sector uses standards-based compression solutions that improve performance and reduce transmission and storage costs, effectively essential tech.
Searle said the opportunity is huge for InterDigital. Providing perspective, the analyst said that a $0.01 per month fee, for example, across the top ten global streaming platforms would translate to an annual $100 million+ or about $3.00 per share in earnings.
“While early, we believe this opportunity has been actively developing over a multi-year period and expect this model to emerge within the next couple of years (Note: this is not built into our current expectations),” he said.
IDCC shares are up about 90 per cent year-to-date, but Searle has maintained a “Buy” rating on the stock and $114 per share target, which at press time translated to a projected one-year return of 19.6 per cent.
Searle is forecasting InterDigital’s revenue going from $457.8 million in 2022 to $513.2 million in 2023 and to $434.2 million in 2024, while EPS is expected to go from $4.45 per share in 2022 to $8.08 in 2023 and to $5.65 in 2024.
“With additional upside of $2-3 EPS in the core wireless business (Samsung arbitration, OPPO & Vivo licenses), video CE opportunities ($1+ EPS) and emerging recurring video streaming monetization ($3+ EPS), we remain comfortable with a $7.00+ EPS target over the next two to three years,” Searle wrote.
https://www.cantechletter.com/2023/07/still-more-upside-to-interdigital-says-roth/#
older article
InterDigital is a double from here, Roth Capital says
Good news has been coming in from InterDigital Inc (InterDigital Inc Stock Quote, Charts, News, Analysts, Financials NASDAQ:IDCC), according to Roth Capital Partners analyst Scott W. Searle, who delivered an update to clients on the company on Tuesday. Searle maintained a “Buy” rating on the stock and $100.00 target price, which at the time of publication represented a projected one-year return of 102 per cent.
A leading designer, developer and licensor of advanced technologies for mobile devices and networks, InterDigital has a portfolio of over 19,000 patents, with an emphasis on communications and patents for 3G, 4G, Wifi and emerging 5G applications along with IoT, video and sensor solutions.
The company announced on Tuesday that its board has authorized an increase to its stock repurchase program by $333 million to a total of $400 million, with the company saying it will use its cash resources to facilitate the buybacks.
Also on Tuesday, InterDigital announced an agreement with Samsung to have a panel of arbitrators to “establish the royalties to be paid by Samsung,” with the outcome to be a global licensing agreement expected to be concluded within about 18 months.
“While we always prefer to conclude our license agreements through amicable good faith negotiation, independent binding arbitration provides an effective mechanism for resolving licensing disputes,” commented Liren Chen, CEO and President, InterDigital, in a press release. “I welcome Samsung’s willingness to enter into a new license with us and their commitment to work through the remaining issues in arbitration.”
Finally, on Tuesday InterDigital further announced a new video licensing agreement with LG and a renewal of one with Panasonic.
Searle called the Samsung arbitration news a mixed bag with more positive than negative, since Samsung is acknowledging that it uses IDCC patents and expects to be required to use their IP going forward and, further, Searle said arbitration will be less costly and more amicable route.
“Overall, we view the news as a net positive with Samsung’s arbitration acknowledging IDCC’s patent validity (and avoiding a license agreement lapse), just debating the actual annual value (Note: We highlight that Samsung pays ~60 per cent of the recent Apple renewal). While near-term revenue recognition questions exist, we believe the longer-term sales and EPS will be higher,” Searle wrote.
On the share buyback plan, Searle pointed out that the $400 million amounts to about 26 per cent of IDCC’s market cap at the start of the new year.
“While we believe this encompasses an element of stock support, given potential investor discomfort around the arbitration timeline and outcome, it also underscores the successful conclusion of the Apple renegotiation and partial resolution with Samsung (arbitration). Consequently, capital requirements for a protracted and expensive litigation have been mitigated, leaving the prior balance sheet with $863 million in cash (FCF positive operations) in an overcapitalized state. Overall, the buyback is healthy, accretive and provides support,” he said.
Buy, Hold or Sell: AT&T (T) vs InterDigital (IDCC) Mangeet Kaur Bouns via StockNews | July 04, 2023
(a few paragraphs on IDCC several paragraphs below)
With the growing demand for high-speed data connectivity amid rapid digital transformation worldwide and increasing government investments, the telecom industry's growth prospects look promising. Amid this backdrop, let's find out if investors should buy, hold, or sell AT&T (T) and InterDigital (IDCC) now. Continue reading….??
Despite macroeconomic uncertainties, the telecom industry strives to remain resilient. The industry is well-positioned for significant long-term expansion, thanks to soaring demand for efficient connectivity amid the rapid digital transformation of businesses and consumers' lives. In addition, growing federal government funding for telecom infrastructure should fuel the industry's growth.
While investors should hold telecom stock AT&T Inc. (T) and wait for a better entry point in this stock, fundamentally sound InterDigital, Inc. (IDCC) could be an ideal buy now for solid returns.
Despite an uncertain macro environment, the telecom industry is poised to witness robust growth in the foreseeable years, driven by a rising number of mobile users worldwide, the continued importance of efficient data connectivity, and the growing demand for value-added managed services.
Moreover, with a surge in e-commerce, integrated Internet of Things (IoT) solutions in manufacturing and supply chain, or connected vehicle experiences in the automotive industry, the rapid digital transformation of businesses and consumers' lives provides numerous opportunities for the telecom industry to extend revenue streams beyond just connectivity.
Communication services providers (CSPs) capitalize on the opportunities and deliver value to consumer and enterprise customers with bundled services and connectivity options such as 5G fixed wireless access (FWA) and fiber.
According to a report by Grand View Research, the global telecom services market is projected to reach $2.87 trillion by 2030, growing at a 6.2% CAGR. The U.S. telecom services market is expected to expand at a CAGR of 6.5% during the forecast period from 2023 to 2030.
Growing government initiatives and investments to drive 5G deployment and adoption of fixed and wireless networks nationwide should also boost the telecom industry's growth and expansion. On April 12, Biden-Harris Administration announced the launch of the Public Wireless Supply Chain Innovation Fund, which aims to invest $1.5 billion in developing open and interoperable networks.
"The Innovation Fund is a critical step toward securing 5G wireless networks while driving innovation at home and abroad," said U.S. Secretary of Commerce Gina M. Raimondo.
He added, "Investing in the next generation of innovation will unlock opportunities for new and emerging companies to compete in the global telecom market, strengthen our telecom supply chains and provide our allies and friends with trusted choices and innovative technologies to compete in the 21st Century."
As per a report by Grand View Research, the global 5G services market is expected to reach $2.21 trillion by 2030, expanding at a CAGR of 59.4%.
Investors' interest in telecom stocks is evident from the SPDR S&P Telecom ETF's (XTL) 6.2% gains over the past month.
Given this backdrop, investing in quality telecom stock IDCC for potential gains could be wise. However, investors could add T to their watchlist and wait for a better entry in this stock.
Let's discuss the fundamentals of these stocks in detail.
(Did not copy & paste the AT&T write up...it was a Hold btw)
Stock to Buy:
InterDigital, Inc. (IDCC)
IDCC designs and develops technologies that enable and enhance wireless communications internationally. The company provides technology solutions, including 3G, 4G, 5G, and IEEE 802-related products. It also offers video coding and transmission technologies; and engages in the research and development of artificial intelligence.
On May 17, IDCC and the 6G Innovation Centre (6GIC) at the University of Surrey announced a bilateral research partnership to develop 6G enabling technologies that might impact future wireless standards.
"Our new partnership with 6GIC reflects InterDigital's commitment to collaborate with leading universities and programs to encourage innovative research outcomes and bolster the impact of our innovation through wireless standards like ETSI and 3GPP," said Milind Kulkarni, VP and Head of Wireless Labs at IDCC.
On May 15, IDCC signed a new patent license agreement with Alps Alpine Co., Ltd., and the deal covers Alps Alpine's range of devices under IDCC's standard essential patents related to HEVC.
In addition to demonstrating how IDCC's innovation is applied across a range of devices, its long history of research in the video space implies its asset portfolio strength in HEVC and other leading codecs. The collaboration should boost IDCC's revenue stream and expansion.
IDCC's trailing-12-month gross profit margin and EBIT margin of 86.18% and 43.36% are 76.9% and 943.2% higher than the industry averages of 48.72% and 4.16%, respectively. Likewise, the stock's trailing-12-month net income margin of 32.38% is significantly higher than the 1.71% industry average.
In terms of forward non-GAAP P/E, IDCC is trading at 12.25x, 47.7% lower than the industry average of 23.40x. Also, its forward EV/EBITDA multiple of 7.20 is 51% lower than the industry average of 14.69%.
IDCC's total revenue increased 99.7% year-over-year to $202.37 million in the first quarter that ended March 31, 2023. Its income from operations rose 295.1% from the year-ago value to $119.26 million. Also, the company's adjusted EBITDA grew 179.5% year-over-year to $154.81 million.
Furthermore, the company's non-GAAP net income and non-GAAP net income per share were $123.62 million and $4.21, up 301.3% and 325.3% year-over-year, respectively.
Analysts expect IDCC's revenue for the fiscal year (ending December 2023) to come in at $532.85 million, indicating an increase of 16.4% year-over-year. The consensus EPS estimate of $7.85 for the current year reflects a 107.9% year-over-year improvement. Moreover, the company has surpassed the consensus revenue estimates in each of the trailing four quarters.
IDCC's stock has gained 70.9% over the past six months and 55.5% over the past year to close the last trading session at $96.09. The stock has gained 14.5% over the month.
IDCC's POWR Ratings reflect a strong outlook. The stock has an overall grade of B, translating to Buy in our proprietary rating system.
IDCC has a B grade for Growth, Value, Sentiment, and Quality. Within the same industry, it is ranked #3 of 18 stocks.
To see additional POWR Ratings (Momentum and Stability) for IDCC, click here.
Vegas breakout the “two buck chuck”, based on today’s oreeno’s you can give us all a swig.
At a $100 we can talk about the Louis the 13th.
June 30, 2023
Via CM/ECF
The Honorable Joshua D. Wolson
U.S. District Court for the Eastern District of Pennsylvania
3809 U.S. Courthouse, Courtroom 3-B
601 Market Street
Philadelphia, PA 19106
Re: InterDigital Technology Corporation, et al. v. Lenovo Holding Co., Inc., et al.
C.A. No. 1:19-cv-01590-JDW
Dear Judge Wolson,
The parties provide the following update regarding the status of their UK proceedings:
On June 27, 2023, Mr. Justice Mellor, the trial court judge in the parties’ FRAND
proceedings before the High Court of Justice of England and Wales, issued his final Approved
Judgment and Order, both attached hereto. The Court's “Settled License” is appended to the
Judgment.
With respect to the mootness issue, InterDigital’s position, consistent with the position
articulated during the parties' March 22, 2023 status conference, is that all issues in the Delaware
case are—or will become—moot. InterDigital respectfully submits that any decisions on appeal
in the UK proceedings could have an impact on those issues, and therefore InterDigital believes it
would be premature to formally address mootness at this time. To avoid the unnecessary
expenditure of party and court resources, InterDigital proposes that this case be stayed in its
entirety.
Lenovo’s position is that InterDigital’s patent claims are now moot and should be
dismissed. Lenovo otherwise agrees that all other claims currently pending before this Court
should be stayed at this time.
As instructed in the Court’s March 23, 2023 order, Dkt. 313, the parties will notify the
Court when the UK proceedings have concluded and the final agreement between the parties has
been executed.
Respectfully submitted,
/s/ Neal C. Belgam
Neal C. Belgam (No. 2721)
Question: The UK High Court ruled that IDCC had 3 patents that were valid and essential and then applied a rate of .175 per unit. Does the rate applied to the 3 patents represent what IDCC is entitled to charge for its entire patent portfolio? What if additional patents are litigated and deemed valid and essential then would that increase what IDCC could charge for its entire patent portfolio?
I'm down to about half my original holdings (should have followed DR's lead and sold more in 2017), but that's just part of the 20+ year saga. Will probably lighten by half in the $100-120 range. Hold the rest. I've expected a buy out for so long, I can't seem to let it go. LOL
Same here, they could make the decision easier by raising the dividend.
I'm torn between selling a portion of my holdings and keeping it for the dividend.
OH, WHAT AM I TO DO !
Just curious - WHO here will be selling when we cross the $100 price point? The last time we did the bitching/whining/moaning was unbearable for those who did not take profits. Been years since I even visited or posted here and in full disclosure I sold "most" of my small position (compared to some heavy hitters here) at $83 years ago. Stay safe folks and Happy 4th of July! PEACE
ANOTHER o'reeno --- $97.02 reached this morning.
Maybe someone found out that the company bought back 1M shares in May and June...
xdx, it is from this morning as the volume today is 400 shares
Vegas, then it's not him, unless it was left over from prior night's close.
Looks like 5 O'clock Charlie bought 300 shares at $98.50 this morning
Teecee, did Five o'clock Charlie get up early this morning for pre-market?
All,
We in IDCC have low float, great earnings, a low P.E. and high short interest. We are in wireless and AI! I think IDCC is quite likely to have a run just like a similar company did a few years ago. The company? Universal Display (OLED). I almost bot OLED years ago but didn't. I had IDCC instead.
IDCC is now acting like OLED did back in 2017. Go to OLED and look at the chart! If past is prologue, we may be looking at $200 a share later this year!!
IMHO - Tomcat
Vegas drink what is available to you.
Louis the 13th. I only get 2 buck chuck...
The “Louis the 13th” is excellent with every new high and oreeno.
Vegas....he started with zero credibility....it hasn't gone up from there
Reductions for when we close a ove $100? I have July 7th.
InterDigital to appeal UK FRAND decision while Lenovo battle continues in China and US
Adam Houldsworth
29 June 2023
Two landmark global FRAND rate decisions by the High Court of England and Wales have disappointed SEP owners in recent months (see here and here).
Now InterDigital has been given permission to appeal one of those judgments, teeing up the UK’s first Court of Appeal dispute on the substance of global FRAND rate methodologies and providing hope to rights holders that a more SEP-friendly approach may be adopted by the higher court.
Moreover, InterDigital’s global SEP licensing fight with Lenovo continues to be fought in China and the US, despite the implementer’s undertaking to accept the rate set by the High Court in London. So the dispute appears to be far from over.
All this was revealed in an extensive follow-on decision handed down by the High Court this week. Dealing with several issues left unresolved in the first ruling, this opinion contains some other notable positives for InterDigital, which has been awarded an additional $46.2 million as part of a global SEP licence that the court has ordered Lenovo to sign. This represents the interest that the Chinese implementer must pay on the $138.7 million royalty the court has decided should have been paid for a global 3G-5G patent licence for the years 2007-2023.
Lenovo had argued that it is not obliged to pay interest to compensate the patentee for delays in payment. This, it said, was because the ETSI policy does not require it, because the $138.7 million sum was calculated in a way that it already accounts for any potential interest, and because InterDigital was found to be an unwilling licensor. However, Mr Justice Mellor rejected these points, awarding the patentee 4% interest compounded quarterly. This takes the value of the global licence to $184.9 million – a substantial increase.
InterDigital, however, was less successful on the subject of litigation costs, which tend to be awarded to the winning party in UK disputes. A substantial sum of money was at stake over this question: InterDigital spent £17.25 million on the FRAND portion of the UK litigation, whereas Lenovo has paid £14.27 million.
Despite the global per unit rate set by the court ($0.175) being substantially closer to Lenovo’s favoured rate of $0.16 than InterDigital’s $0.498, the patentee argued that it was the overall winner because the implementer was the one being forced to ‘write the cheque’. InterDigital had also needed to take Lenovo to trial to obtain a global licence agreement, it added, and to force the implementer to accept the court’s ruling.
However, Mellor J stated that he was “in no doubt that Lenovo are the overall winner of this FRAND trial”. Agreeing with Mr Justice Birss in Unwired Planet, he held that FRAND rate disputes are tariff-setting exercises. It matters, therefore, that the court largely sided with Lenovo on the subject of top-down checks and comparables analysis, and that it granted an award much closer to the implementer’s suggested licensing fee.
But despite ordering InterDigital to pay most of Lenovo’s costs, Mellor J circumscribed some specific outgoings that must be paid by the implementer. Lenovo must pay InterDigital’s costs relating to the questions of foreign law that the Chinese company raised then abandoned during trial. It must also cover the patentee’s outgoings relating to the dispute over interest payments, Mellor J ruled. The breakdown of these sums will need to be subjected to detailed assessment if an agreement cannot be reached.
The follow-on decision also throws light on the nature of the parties’ broader global dispute. Though the UK court’s decision concerns a global licence rate and Lenovo has undertaken to accept the ruling, the companies continue to fight it out in China and the US.
A trial at the US District Court for the District of Delaware is scheduled for 4th December this year. This will consider InterDigital’s claim that Lenovo is infringing seven of its 3GPP SEPs as well as Lenovo’s antitrust counterclaim which, among other things, seeks “a refund for any overpayment for a licence to US Patents based on InterDigital’s UK action”.
Lenovo is also challenging the outcome of the UK court’s global FRAND decision in Chinese proceedings before the Beijing Intellectual Property Court, which it is asking to set a FRAND rate for the Chinese portion of InterDigital’s portfolio.
In fact, Lenovo has told the Beijing court that its decision may have an impact on the rate set by the UK courts. This despite the fact Lenovo abandoned its argument that the UK-set licence should contain an adjustment clause (to factor in subsequent US and Chinese decisions) during the High Court trial.
It also transpires that Lenovo had once again reversed its position on this matter in UK proceedings, asking Mellor J to include an adjustment clause in the global licence, allowing royalties to be changed in accordance with future decisions elsewhere.
It is clear, Mellor J stated, “that Lenovo does intend to maintain their attacks on the Judgment, the Licence and to undermine its Undertaking to this Court”. He refused to include an adjustment clause in the licence that Lenovo must now sign. However, Mellor J continued, “it is for the US and Chinese Judges to regulate the proceedings which are before them, not me”. So the global licence set in London may not ultimately be the final word on the parties’ agreement, if either party can persuade other courts to intervene.
Even more interesting is that Mellor J has granted InterDigital permission to appeal – and Lenovo to counter-appeal – his FRAND decision.
InterDigital had expressed its intention to challenge the ruling on several grounds. These include that the rate Mellor J derived from the LG 2017 licence ought to have factored in the sub-FRAND rates paid on past sales in that agreement, and that the finding of unwillingness against it failed to consider its offer of third-party arbitration.
These arguments were dismissed as unlikely to succeed, but Mellor J permitted an appeal to seek guidance on several points of principle relating to his ruling. These include whether national limitation periods have a role to play in rate-setting; whether volume discounts are justified; whether it is appropriate for the court to seek to discourage hold-out; and whether it would be discriminatory against Lenovo to apply the kinds of discounts hitherto applied by InterDigital.
Lenovo, for its part, has been allowed to appeal the award of royalties from before the six-year limitation period.
This is good news for the patent community, especially SEP owners, because it promises further guidance on the principles according to which global FRAND rate decisions will be made in the UK.
Such guidance is much needed because of the dearth of existing case law: only three such decisions have yet been made by the English High Court and the Court of Appeal has not made a detailed judgment on methodological rate-setting questions.
https://www.iam-media.com/article/interdigital-appeal-uk-frand-decision-while-lenovo-battle-continues-in-china-and-us?utm_source=InterDigital%2Bto%2Bchallenge%2BUK%2BLenovo%2BFRAND%2Bdecision&utm_medium=email&utm_campaign=IAM%2BDaily
He would do it only on valuation.
Vegas, wouldn't it make more sense for Tai/BofA to stay pat on his recommendation until updated guidance comes out? Tai would risk looking foolish with any change in his recommendation at this time (and I'm assuming all of their private clients were given a heads up prior to the surprise change from neutral to buy). I know short interest is significant, but who exactly is short?
Should we be expecting updated guidance from the company prior to earnings? How and when will the awards and interest be recognized? Is the future income from A.I. able to be estimated at this time? Is there another surprise licensing deal in the works? Has the company bought back more shares? Are there any suitors who want to take this company private or acquire it for all of it's IP?
Any downgrade at this time would seem to be agenda driven and not necessarily supported by the facts (though valuation is as good a reason as any without updated guidance), but that is the game played by some of the analysts who are merely shills or mouthpieces. IDCC was certainly not a game for the faint of heart over these past many years, but they certainly have impressed with their most recent history in how they've managed the company.
Best of luck Vegas.
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