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sonic22, things could just work out like that. I've got a concern though that such an approach might open up a whole new avenue of legal actions against IDCC since NOK and Samsung might contend that IDCC is in fact not granting them FRAND rates and that they (NOK/Sam)should not be punished for pursuing what they believed was legally and rightfully available to them. If an injunction had already been imposed and NOK/Samsung had to work through the legal action while being prevented from selling in the US market, it may not be of any importance to IDCC. However, if they were able to get a stay on an injunction, it would be a wholly different story.
I would love to hear another opinion from a legal perspective on that though. whisseresq however already did offer a scenario similar to yours, if I recall correctly, and he certainly has the legal background.
revlis, thanks to you and the others that are able to find the facts surrounding an issue and bring to the rest of the members here for discussion. It is a tremendous service to us all.
Again, thanks revlis. You have been able to post a lot of good information pertaining to the subject. I'm still confused as to whether this information supports Mr. Aynes position or not though. Much appreciated.
"No..i don't think Nokia really has that adverse relationship as even BM alluded"
You may be right paheka but I'll believe it when I see the press release that NOK has signed with IDCC. The term "scorched earth" that is used by others here indicates that I'm not alone in my belief. But, again, you may be right.
Hah! Damn good argument, IMO.
revlis, thanks for posting that. I'm trying to understand the writing and whether it somehow supports Mr. Aynes position.
Portions of the section of ETSI rules that you posted state: "6.1 When an ESSENTIAL IPR relating to a particular STANDARD or TECHNICAL SPECIFICATION is brought to the attention of ETSI, the Director-General of ETSI shall immediately request the owner to give within three months an undertaking in writing that it is prepared to grant irrevocable licences on fair, reasonable and non-discriminatory terms and conditions under such IPR to at least the following extent: ............ The above undertaking may be made subject to the condition that those who seek licences agree to reciprocate."
What in your opinion is meant by that last sentence? Does it support Mr. Aynes position? One interpretation I have though of is that it means that those who seek licenses will reciprocate in granting their own IPR on FRAND terms. I appreciate any help on this that you can give
That's the point of NOK's attack. First they intend on getting IDCC into court or arbitration and then file a motion to delay while another friendly court (such as the UK) decides whether the patents are essential. If NOK looses, there is an appeal while at the same time there is another court action to see whether the patents are valid with the possibility of an appeal on that one also. The delay continues to go on for years. Meanwhile no one licenses and IDCC dies a slow death or is severely stunted in it's growth while starving for licensing income. Irreparable harm indeed!
m3s, I agree. In addition, can anyone show where there is a legal opinion that agrees with Mr. Aynes position that by participating in the ETSI and declaring your patents to be "essential" to the standard, automatically enters the company into a license with all the other participants. Surely there must be some clear language to that effect that has been issued by the ETSI. Apart from that, Mr. Ayne testimony is nothing but a vagrant opinion; one with no means of support.
I would think that during the court ordered negotiation rounds, IDCC will make what they think is a FRAND offer. It may be that if the Judge thinks it is a reasonable offer, he may see it as the basis for settlement if other terms are not arrived at. I defer to the legal minds on that though. Just a thought.
revlis, thanks for the correction. Yes, IDCC declared the patent "essential", not the ETSI. Aside from that, my point remains the same.
A question though, Does anyone know if NOK has ever proceeded against another company utilizing Mr. Aynes interpretation of the law? Qualcomm comes to mind but are there others?
I'm not disagreeing with you because you certainly could be right. I was only pointing out a possibility.
desert D, Your completely right.
Mr Aynes states that if, after the ETSI has declared a patent "essential", the patent owner can then withhold the use of that patent until a price has been negotiated, it allows the patent owner to be in an abusive position in relationship to the contract negotiations. However, as can be seen by NOK's historical actions concerning negotiating and paying for patent rights, the opposite becomes true if Mr Aynes proposal becomes the rule. In such a case, IDCC has no leverage whatsoever, and NOK can use the patents forever unless IDCC settles for whatever pittance NOK offers. The idea of going to court or arbitration might be alright if there was some expedient way of doing that. We've already seen the result of IDCC entering into "final arbitration". Final isn't final at all. It's just one more excruciating step in the delay game. The company has languished for years, unable to reap the rewards of its endeavors. Whatever the company has in cash has to be made ready for legal expenses. Even today, the company is in something of a prone position as a takeover target because of the delays and the effect on the stock price. Talk about "irreparable harm"! Ridiculous!
If the Judge wants to entertain some of Mr Aynes arguments, IMO, he should instruct NOK and Sam that they will face an injunction against their products until they have settled a rate with IDCC. After that, they can either sue for or enter into arbitration for an adjusted rate they feel is more "FRAND". That would put the shoe on the other foot for awhile.
rev"is, concerning your statement "It would have to be NOK providing clear and convincing evidence that IDCC patents are essential.", it may depend on whether IDCC has declared the patents to be essential, which I assume they have since Mr. Aynes brought the argument, that causes the first hurdle to be crossed. Just an observation. However, after reading Mr. Aynes "expert" opinion, I have a very hard time believing the Judge would accept any of that crap. There is so much convoluted thinking in his statement that it's difficult to even discuss it, IMO.
sail, my response is not based on any experience other than being invested in this stock for approx. 7 years and watching both IDCC and NOK. IMO, NOK will take it all the way until just before the final release in the fall, and only if it is evident IDCC has prevailed. I doubt that IDCC is offering any incentives high enough to induce NOK to acquiesce. In my opinion, NOK will sign only if they have no other option but they will not blink.
LOL; yes, that too!
The buyback does not appear to be going on today.
Yes, that is an expensive error, one that I made myself before. Fortunately the price was in an uptrend and I was soon out of the hole. Cost me some profit though.
Selling margin calls?
I saw that buy and it appears to me that someone entered a market bid instead of a limit order and so the price spiked up.
m3s, If my memory serves me correctly, when NOK was set to renew its license with Qualcomm, they argued that Q's rate was not reasonable due to the fact that so much of the 3G standard contained less IPR percentage wise that of 2G and consequently refused to pay the old rates. That's when Q filed their suit against NOK for past infringement of Q's GSM patents. From my perspective, it looked like Q was trying to raise the stakes by saying in effect: "you should have been paying even more than you have been. Therefore, you need to go ahead and license for 3G and we'll let bygones be bygones." That's my take on it.
Now that Q has lost, it may have a negative effect making it even more difficult to prevail over NOK and even spill over into the rest of Q's licensees. IMO
m3s, I agree with you. I believe there are additional reasons that all add together to make it plain smart for Samsung to proceed they way they have. If I'm not wrong, Samsung had a limited amount of time to file an appeal before they were under court order to make payment. Accordingly, they did file an appeal and they posted a bond (which really just meant they had to pay a fee to a bonding company. Samsung doesn't really have that money tied up.) By this action, Sam delayed the payment, but only as long as they could drag out the appeals process, and there was a real possibility that the appeal would be denied. To further delay the payment, Samsung then files to stay the appeal! If the court agrees, Samsung will have very cleverly worked around the deadline to appeal. They did appeal, but if they were to have their motion granted. they're right back to letting the arbitration panel run it's course first. It's very hard to believe a judge would fall for that kind of manipulation. Someone correct me if I don't have this right.
To anyone: Am I right in my understanding that if the ITC rules in IDCC's favor and institutes a ban on NOK/Samsung handsets until they license with IDCC, IDCC would be able to deny Samsung a license until they payed up for their 2G obligations as well as 3G?
If so, I would think that the appeal and the arbitration III would only come into play if Samsung wanted to wait to license while they waited for those actions to run their course, (An unlikely scenario, IMO)
March 24 is indeed an important date.
knowing nothing about how the NY District judge is supposed to proceed in a case like this, I still cannot imagine that the judge would not review any and all of the ALJ's opinions on the matter before making a decision. With the forceful denial by the ALJ, IMO, NOK can pack it in on this one except for the sake of going through the motions
sloane, I've got to give you credit for thinking ahead.
gio, thanks for posting that. It is very pleasurable to read the judges response to NOK's arguments and position. He summarily takes a large mallet and smashes each one like a bug on a flat steel tabletop. I love it
Have you possibly looked at the rest of the market? Personally, I wasn't looking for IDCC to recover a lot until we begin to see something as a positive follow up to the earnings release. I'm pleased to see IDCC holding its own today. I'm hoping the 10K has something to give us a little positive boost.
Does anyone have an idea as to who will be producing the 3G modem for the AirMac?
Thanks for posting that revlis.
We had one hell of a jump in operating cost (66%) for the year, of which "The increase in patent administration and licensing costs was primarily due to a $15.4 million increase in litigation and arbitration costs.". Since IDCC only made $20 million, its apparent that if we can ever get by the litigation, the value of this company will grow dramatically.
One concern that has been noted by others is the cost increase for the 1st quarter of "the 5% to 10% range due to normal wage inflation and seasonality related to vacation accruals and other personnel costs." That statement doesn't seem to match the earlier statement by the company that they "anticipate maintaining our staffing at a level that is relatively flat with fourth quarter 2007". It would be nice to have an understanding of that, even if it's a moot point in terms of whether they do it or not.
Desert D, You're probably right. It's been said before but when you couple this with the possibility that Sam could face sanctions for proceeding frivolously, it makes sense.
GEEEOOH! I like the looks of that! Veeerry interesting! Can we say...NEGOTIATION? (I hope)
I've got a thought on that. Since IDCC's first share repurchase didn't seem to slow down the price decline from the short attack and since IDCC probably knew that they would miss earnings, they may have made a decision to keep the bid below a certain number that would both help put a floor under the stock and take advantage of the downward pressure that would occur after the earnings release. Certainly, if the theory that the stock is being shorted in order to drive the stock down to the level that a hostile takeover is much easier, it would be smart for IDCC to be more strategic in it's buyback. IDCC may not have authorized the stock buyback just to increase share value but perhaps to act as a defensive move as well.
Sloane, I'm not disagreeing. Yes, lot's of positives. I'm still all in.
Well welcome aboard mate!
jjff, I don't think that the ITC is making a judgment on essentiality but rather whether IDCC patents, essential or not, are being infringed.
sloane, in the overall picture, I believe you're right. Not much has changed. I am not in for the earning this quarter. If there had not been the accrued money, IMO, we still would have had a similar drop due to a still pretty decent miss on earnings. We are back up by almost half already though. The reason is that most are invested for the future. There are a lot of positive developments occurring.
On the other hand, the miss is not going to help bring in the institutions. Regardless of how bright we see the future, I can't help but believe that the analyst and institutions that are already holding are pretty disappointed with elements of the earnings release and CC. They too can't be happy with how so many things have continued to back up.
Its been one of the things that have made IDCC a trader's dream stock. Like most occasions, I didn't play it that way but there's no doubt though that the traders continue to be the big winners here.
LOL! Well Jim, I remember when you sold way back and many here laughed and said you had made a mistake and were going to miss the boat. Today, here we are; the storm has forced us back to port. You're looking rested while the rest of us are sort of seasick. Please try not to tease everybody too bad though. The ride has been bad enough without having the insult added to the injury.
One thing I'm sure TC was surprised about was that he was predicting the possibility of additional buyback moneys instead of thinking that only 25% of the last buyback had been completed. When asked about additional buyback money, the response, IMO, was a lukewarm "we will look at it and give it consideration".
revlis, My guess is that SE has already agreed that as soon as the other two are licensed, they will sign as well. No need in fighting three when the battle against two will achieve the same purpose. As far as MOT is concerned, it's been my impression that IDCC has more or less written off 2G with them, at least until the others are in the fold on 3G. Also, once the ITC rules against NOK/Sam, that ruling would set a precedent against all others. The others would be foolish to waste legal fees on something when the outcome would already be assured. They may make MOT catch up on the 2G once they have cleared the other legal actions. With the others signed for 3G, I think a 3G license with MOT is a forgone conclusion. JMHO
Absolutely. Additionally, it makes perfect sense. If I was in the shoes of one of the unlicensed, I would wait. What would be the penalty? The risk of paying and then having NOK and Sam continueing to get away without paying is too great when measured against any advantages in paying before they do, IMO.
He said in the CC, in response to a question, that the Asian mfr was associated with the worlds largest wireless market and said that he thought that the questioner would know who he was talking about. So, yes, I believe they we're talking about China