Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
I didn't delete anything
I have no idea what is going on or what happened to messages 3 and 4.
I did notice that another old board, RSHCQ, also seemed to have the same problem in that the board was not showing.
I also had problems with looking at older posts on WDDD. I tried to go to post 1, but couldn't go back beyond 22,000 in time.
Louis J. Desy Jr.
Certificate of correction
There was a lot of back and forth as to even if a certificate of correction was needed or should be the new date to consider the patents as being in effect.
There was also problems in that the cover sheet referred to did not exist at the time of the original patent filings.
In the end, the court decided that it was not reasonable for other companies to 'have notice' that they were infringing on the patents until the certificates of correction were filed.
I am looking to see about the prior discussions on the timelines. They listed when the patents would be in effect and the timelines for filing against other companies.
Louis J. Desy Jr.
Notice of Infringement
There are a number of places where people were talking about WDDD suing Second World back in 2007, multiple articles that listed potential infringers, and even interviews with WDDD where they stated they tried to get companies to sign up for licensing deals.
The Risk of Sleeping on Your Patent Rights
http://www.ipwatchdog.com/2010/05/27/the-risk-of-sleeping-on-your-patent-rights/id=10777/
Notice of infrigement is not just 'when did you know' but also, 'when you should have known'
Simple explanation of laches and patents
The Risk of Sleeping on Your Patent Rights:
http://www.ipwatchdog.com/2010/05/27/the-risk-of-sleeping-on-your-patent-rights/id=10777/
Six year deadline to file a suit
I am looking for the VRNG vs GOOG decision that showed that. I will need to look on pacer. It should have been from around October 2012.
Louis J. Desy Jr.
Not Susman Godfrey firm's fault for how the case went
I have emailed Max Tribble. I never faulted SG with what has happened with the case and do not think anyone could have done better for WDDD. I think SG did the best that was possible, especially with the problems with the certificate of correction and the USPTO error on recording the patents, early in the case.
If you look at my old postings, you will see that I believed that damages should have been allowed to the time prior to the certificate of correction since the references and problems surrounding the cover sheet was about items that did not exist when the original patents were filed. i.e. There was no cover sheet because that was not part of a patent application back then.
The lawyers for ATVI (Ropes and Gray was the firm, I think) were fortunate to have the rulings and process go there way and the decisions explained why the ruling went ATVI way.
Louis J. Desy Jr.
Six year limit to bring a lawsuit to get prior damages
The point is that WDDD only had six years to file any lawsuits against anyone it thought was infringing in order to get damages for the time prior to filing. While WDDD did file the ATVI within such a time period, WDDD never filed any other lawsuits.
If you look at the old estimates for what the patents could be worth, it was expected after a win against ATVI that other companies would be taken to court if they did not sign a licensing deal and be eligible for prior time periods.
Since it was known back in 2007 that there were other companies infringing besides ATVI, and WDDD never filed any lawsuit against them, damages in those cases can only run from the date a lawsuit is filed and forward.
This means if WDDD does not file a lawsuit before the patents expire, WDDD will not be able to collect anything from anyone except ATVI. Lawsuits against other companies may only have a few years or nothing left at this point.
If the timeline for the patents for infringement for WDDD to file a lawsuit is when the patents were awarded, the time may be just about done.
Louis J. Desy Jr.
First message?
I am not sure, but it looks like the old board messages are gone?
I distinctly remember posting here months ago, or at least I thought I had.
Louis J. Desy Jr.
More than six years on other infringements
Posting from ihub in 2007 that mentioned other infringements:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=23080317
It appears that as far back as 2007 it was thought by people that if there was any infringement, there were other companies infringing.
That means the six year deadline to file a lawsuit for companies besides ATVI probably would have run out in 2013.
It looks like the current lawsuit against ATVI will be the one and only lawsuit possible for damages for the patents.
Louis J. Desy Jr.
Additional on Doctrine of Laches
Laches Remains a Defense to Patent Infringement
November 2015:
http://www.bakerbotts.com/ideas/publications/2015/11/ip-report-laches-remains-a-defense
Wait until the truck loads of shares are sold
I am sure the market will show you that it is true as the stock continues to decline as millions upon millions of shares are dumped onto the retail market every year.
At least with a lower share price it will be easier to buy up the shares.
Louis J. Desy Jr.
Correction on Doctrine of Latches
I made an error in what I posted about the six year timeline and my application of the VRNG vs GOOG. It is actually worse for WDDD than what I had originally posted.
The standard for filing a lawsuit suit for damages is six years. In a patent case, and in VRNG vs GOOG, the court held that since VRNG waited more than six years from the first infringement, that VRNG could not go back six years from the filing and could only claim damages from the lawsuit filing date forward.
As applied to WDDD, that would mean any other company besides ATVI would probably only be liable for damages from the date the lawsuit is filed and going forward. If WDDD does not file a lawsuit against other companies prior to the expiration of the patents, then no damages will be allowed.
Louis J. Desy Jr.
http://www.cheatsheet.com/stocks/vringo-crashes-over-40-percent-on-typo.html/
Common shares increases over the years
WDDD had 53,663,758 million shares outstanding on March 31, 2010.
Source: 10K report for date 12/31/2009:
http://ih.advfn.com/p.php?pid=nmona&article=42400568
Notice of infringement
There was some discussion a while ago. I think the problem is that WDDD is going to be limited to ATVI for damages for the entire infringement, and only the past six years on any future lawsuits against other companies from the date of the filing.
The problem with other companies, besides ATVI, is that in order to collect WDDD needed to do something, like file a lawsuit, in order to collect damages.
This whole thing with the patents has been going on for a while, plus multiple people posting about speculation about other infringers. I would expect on any other company that WDDD tried to sue, WDDD would be limited to the day the lawsuit was filed and the prior six years for damages.
I seem to recall that the same problem happened with VRNG vs GOOG, where it was held that VRNG should have known that the patent was being violate long before they filed the lawsuit, so damages were limited in that case to the day of filing and the prior six years from that date. VRNG tried to argue to the court that they had some problems and disorganized and not able to file the lawsuit in a timely manner and asked the court to 'give them a break', but the court ruled against them on the issue.
The public policy that supports such a view, is that if you have damages, you can't wait forever to do something about it and expect a court to take the case. Also, it is not fair to any defendant to take more than six years to put them on notice about any damages.
Louis J. Desy Jr.
What they need and what they do about cash
While they only have need about $30K per year, their past history does not show that. They appear to really need or want much more than that.
Again, over the lat year years the company issue over 100 million common shares and only has $16K to show for it.
It appears that the company really is spending over $150K per year, but pays for it by issuing more shares instead of raising cash.
If I am correct, we can prove this by watching to see if over time the issuing of common shares continues to increase by 20 to 30 million common shares per year.
At that rate the common shares should exceed 300 million shares by 2020.
Louis J. Desy Jr.
20 to 30 million shares per year
Back in, like 2012, the company had around 100 million shares.
Today, in 2016, the company has around 210 million shares.
In four years the common share count has gone up by about 100 million shares, which comes out to an average of 25 million shares per year.
While the company seems to only need a small amount of cash each year, the millions of common shares that are being issued, on average, every year do not back up that estimate.
Even after issuing something like another 100 million common shares, the company has less than $20K in the bank.
Clearly, the idea that the company 'only needs a little cash each year' to keep going is not correct, and needs millions of additional shares constantly to keep going.
Louis J. Desy Jr.
Present value analysis
If you really believe the simple set of numbers I presented are how things going to go, and do not need to be modified or any percentages applies to any steps of the legal process or hurdles that WDDD will have to overcome to get $300 million, then you should buy as much as possible.
You will recall, my main point was to show and illustrate that the case taking years to complete did have a big difference on the present value per share.
One of my assumptions was that the shareholder count was around 200 million common shares to the end of the case, but as we have seen from the recent S1, we can expect the company will need to continue to issue 20 or 30 million shares per year in order to stay in business and keep going, which will drive the present value per share count down.
In order to use the framework I presented, one needs to discern what the final judgement amount will be, plus they need to come up with an expected year that such a payment would be made to WDDD.
I seem to remember there was a patent litigation case with a company in Canada that took about a decade before any money was paid. (Blackberry or Nortel I think was the case winner.)
Louis J. Desy Jr.
Present value of any judgment
It matters a great deal when the trial ends for the present value of the judgement.
I seem to recall that most people expected total royalties in the range of $200 to $300 million back in 2012/2013. The calculations back then had a large part for past damages and several years in the future, discounted to present day to give people an idea what the shares could be worth, along with assigning a probability to each step in the legal process towards collecting on a judgement.
As an example of how taking even a few years would effect the present value of the shares, assume that the judgement is $300 million, and the discount rate is 10%.
Year judge PV shares $/share
0 300 300 200 1.50
1 300 272 200 1.36
2 300 247 200 1.23
3 300 225 200 1.12
4 300 204 200 1.02
5 300 186 200 0.93
Year 0 is if the judgement was paid today.
All other years are the payment, in full, at the end of the year.
Judge is the judgement of $300 million
Shares are common shares in millions
$/share is how much the present value of a share would be, assuming all other items are correct.
I assume that someone has done a more recent PV analysis with better numbers recently?
But, to illustrate the point, the number of years does greatly effect what the present value of the shares would be. As you can see, just going out only five years to collecting reduces the present value of the shares by over one third.
Louis J. Desy Jr.
WDDD still owns 18% of WROX?
Does anyone know if WDDD still own 18% of WORX?
I did confirm a while ago that they still have the ownership, but I am not sure if they still own the shares.
Louis J. Desy Jr.
When do you think the trial will finish?
Simple question, when do you think the WDDD vs ATVI trial will end?
Louis J. Desy Jr.
Trial time
My point is that the trial was supposed to have already taken place, instead, years later, the trial has not even started yet, and it looks like it is on hold.
At this rate it is going to be years before a trial even takes place, providing the company somehow manages to stay in business, never mind if the company can win or not.
When I was talking with people here about the expected upcoming trial in 2012/2013, there was not any talk or mention about needing to get a PTAB affirmation of the patents.
Louis J. Desy Jr.
How long to get through trial?
When do you expect the WDDD vs ATVI trial supposed to complete?
Originally, it was expected the trial was going to take place in 2012 or 2013, but here it is over three years later and the case looks like it is going no where on the calendar.
Louis J. Desy Jr.
Appellate court decisions in patent cases
That is why a lot of people, myself included, found the decision to be so shocking with VRNG vs GOOG. Ruling that the patent in VRNG vs GOOG was invalid due to obviousness seemed to be more of a determination for the trier of fact, which is usually done at the district court level by the jury.
While VRNG did try to appeal the decision up to the US Supreme court, certiorari was denied and that was the end of the case.
After that decision, there was a fear in a number of patent cases, including WDDD vs ATVI, that even a win at the district court level, could just be undone on the issue for obviousness on appeal.
Louis J. Desy Jr.
No bid coming?
I noticed that the bid is at $0.0001. Fortunately, the ask is still at $0.0003; but it looks like the stock is heading towards 'no bid. i.e. No offer to buy and millions of shares on the ask at $0.0001 with no trading.
As a side note, I found out that you can put in a bid for less than $0.0001 per share, but have to phone it in to the broker so they can do it through their trading desks. The automated online systems only go to four decimal places.
Louis J. Desy Jr.
Present value of the case
What do you think the present value of the case is?
Louis J. Desy Jr.
Appeal
Yes, the case was VRNG, but when that ruling came down at the appellant level back then, it is also possible use as applicable case law as guidance on patent issues from another circuit in the WDDD case.
For many observers, the VRNG lose at the appeal level was a shocking and unexpected decision. Many considered the cycle for patent cases to be turning against the patent holders in the cycle for the foreseeable future.
The DC appeal circuit is considered one of the expert courts in patent litigation on appeal, so rulings from that case could very well effect the course that WDDD takes. I would expect that if someday WDDD gets through the trial phase with ATVI, then ATVI lawyer would use the same arguments that GOOG used in the VRNG case, and WDDD would have to run the same gauntlet in order to collect on any judgment.
If you look back to the summary judgment motion and hearing from November 2012, you will see that the firm that ATVI has will probably try the same routine that GOOG against VRNG used when it comes time for an appeal.
The part in that appeal, that was stunning to many people was as follows:
An appeal
If you look at the VRNG vs GOOG appeal, you will find a number of people, myself included were stunned when the trial judgement got overturned on appeal in that case. For a lot of people, that was considered the end of the current cycle for patent cases.
It was completely unexpected that VRNG would lose on appeal, especially since it looked like the appeal court overturned the case on the merits and ruled that the district court judgement was somehow an error on the jury's part.
Louis J. Desy Jr.
How long do you think the case will take?
How long do you think it will take for the case to finish, and if they win, WDDD to collect?
Louis J. Desy Jr.
16K in cash is enough?
Do you really think that $16K in cash is enough for them to get all the way to the end of a trial, plus an appeal after a trial is ATVI loses, all of which could take years?
Don't you think that ATVI would take the lawsuit a little more seriously if WDDD had several hundred thousand in cash and it was clear the company had more than enough to last until the end of a trial plus appeal timelines?
At this point, ATVI does not have to win the case, they just need to drag everything out long enough that no one else will willing to put in the next round of financing that allows WDDD to limp along.
If you look at the earlier posts, people were expecting the trial to take place back in 2012. Here we are years later and the case has hardly moved on the court calendar, showing that things have not gone the way anyone expected back then.
There was even some traders back in 2012 in WDDD expecting a run up in WDDD and then shifting everything over to VRNG to get in ahead of the run up expected there.
Louis J. Desy Jr.
They only have $16K in cash
While I do agree that they have low cash requirements, especially with the case being on contingency, they only had $16K in reported cash as of the end of June 30, 2016 10Q.
http://ih.advfn.com/p.php?pid=nmona&article=72197236
I would think that to seem a credible legal threat to ATVI, they really need to have at least several hundred thousand in cash on hand to show they can last to the end of any trial.
At one point they did have 18% of WORX, but I do not see it being reported on the balance sheet anymore.
Louis J. Desy Jr.
Another bad quarter
It looks like they are losing more money than ever.
10Q report for period ending July 30, 2016:
http://ih.advfn.com/p.php?pid=nmona&article=72288391
There was also a story that they are going to sell off some of their brand names (the only brand names they have left?). I think after that there is nothing else left of much value, except any leases or real estate they have.
I think they would be better off going Chap 11 now, breaking all of the leases and closing any store that is losing money.
At this rate they will be Chap 11 sometime next year anyways, and in a lot worse position than they are in now.
I am amazed that the stock is still holding up, at $14.06 as I type, even though equity is in the hole $2.6 billion and looks like the end will be sometime next year.
Louis J. Desy Jr.
Disclosure: I own Jan 2018 $5 puts.
Running out of cash?
How about the fact that common shares are up over 100% since I started following the company, and they are limping along with not enough cash?
I posted that fear I had years ago. It is one of the reasons I sold off my position. At one point I had 180,000 shares.
Louis J. Desy Jr.
I think PTAB will go against
I have not looked closely at that, but the general trend in patent cases and reviews recently seems to be against patent holders for the moment. I do not expect this to change for a few years at least.
The big turning of the tide on patent issues, as I see it, was when VRNG lost the case to GOOG on appeal at the DC Circuit, and then got denied a hearing at the US Supreme court.
While some people viewed the loss as nothing more than 'just another case', a number of people, myself included, were shocked at the outcome. The reason is that here you had a patent, that had been filed years ago by a law firm, reviewed by the USPTO, then other experts in the fields working for VRNG reviewed all of the material, they took the case to court, won a jury trial; only to have to all fall apart on appeal after pressing forward for years.
I think for WDDD to have a chance, there is going to have to be a turning of the tide and opinion on patents, which I expect will take years and be too late for WDDD to realize any money from the patents.
The time for WDDD was back when the whole 'patent lawsuit space' was doing well, around 2011/2012 and the VRNG verdict in its trial with GOOG.
I think the problem is that WDDD decided that instead of taking some money off of the table and taking some profit by doing a deal, they decided they could get everything and precluded doing any deals with anyone.
Louis J. Desy Jr.
At the time it did seem reasonable
VRNG did do a few deals to buy other IP property back then, they bought a patent portfolio from Nortel for cash, they did do a deal with Microsoft where it was contingent payments based upon other revenue and VRNG made it clear they were looking for other opportunities, plus Mark Cuban had bought a few million worth of common shares in VRNG and it looked like the case against GOOG was a winner.
WDDD was in a similar situation as VRNG, in that it had a case with the potential of a big payday at the end, the big difference was that WDDD was almost out of cash, but the present value of an expected win in the ATVI case, at that time, was something in the order of a few hundred million, depending on the outcome of a number of variables.
At possible buyout on the order of $50 million by VRNG was not seen as unreasonable at the time, since it would also spread the risk for both VRNG and WDDD shareholders. (i.e. If the big case each company had went bad for whatever reason, the other case would still support the company.)
Louis J. Desy Jr.
VRNG and WDDD was considered and discussed
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83037224
Comments on stock
If you look back in the timeline, you will see that I did extensively look at several of the issues surrounding the patents, including the whole continuation problems and the issues with the patent office filings.
Especially interesting was the time around the November 2012 summary judgement.
The one thing that I do notice, with shock, is that the stock is only at $0.01 to $0.03; which is something I never thought would happen back then.
Part of what happened to WDDD was back luck. They had all kinds of delays with the trial. There were at least two instances where they were ready to do a reverse stock split and get more funding, and also looked like once the trial finally got going they were going to get a reasonable amount of financing that would have kept them going for a few years. It was expected they thought as time went on, and things looked better and better on the lawsuit, that WDDD would be able to raise enough money and give up smaller parts of the company since the present value would be rising as they got through the various legal hurdles over time.
Instead, it looks like things went the other way for the company over time.
Louis J. Desy Jr.
WDDD and VRNG deal comments
There were multiple rumors and belief that VRNG was interested back in 2012/2013 in doing a deal with WDDD.
At the time it would have made sense, and did look to be very possible. VRNG did have several million in cash, and appeared to be able to raise more cash if the situation called for it.
WDDD, while it had the patents, was almost out of cash, and had no staff. While the law firm for WDDD took the lawsuit on contingency, WDDD still needed money to keep operating and stay alive until they could get through the entire legal process and collect on any judgement. Getting through the entire process until WDDD got paid from any settlement could take years.
WDDD did not have the cash to do that but VRNG, at the time, looked like it very well could, plus at the time it looked like VRNG was going to win its lawsuit with GOOG. Even if any payment from a judgement in that case was delayed, it was expected that VRNG could raise more than enough cash to stay alive until the judgement was collected and be able to push the WDDD lawsuit to the end also.
There was also a benefit in that if VRNG bought WDDD in an all stock deal, the risk in WDDD would have become disverified in now becoming part of the other VRNG patent lawsuits or royalties.
Back then I had expected a deal to be done, all in stock, that could have valued the WDDD shares as high as $0.50/share.
VRNG had people on staff that had done work for the patent office and work as patent attorneys.
Back then I even wrote to the CEO for WDDD recommending that some kind of deal was really needed for WDDD that would give it enough cash to get all the way through to a collection on a final judgement. Without having enough cash on hand to go to the end, there was no reason for ATVI to ever settle any lawsuit since the only thing they needed to do to win was just to keep the clock running in courts until WDDD ran out of cash. That is the problem WDDD has now.
As an example of how bad things are for WDDD, if ATVI really thought WDDD could win, they could just buy a majority of the WDDD stock for only a few million and stop the lawsuit. Someone at ATVI probably thinks that the legal fees in the case will be less than the amount to buy a majority of WDDD, otherwise they would have done it by now.
Louis J. Desy Jr.
I am still shocked at 210MM shares
You have to understand, that for large parts of time when I held the common shares, (2012 and 2013?), the common share count was around 100 million to 110 million' plus the stock was trading anywhere from $0.05 to $0.20 at times.
So seeing the stock like this is kind of stunning to me since I had only watched it a little over the last few years.
Louis J. Desy Jr.
My mistake 35MM shares and 35 MM warrants
I made a mistake in my reading of the S1.
I thought it was two sets of 35 million shares. It is really 35 million common shares and then 35 million warrants.
Louis J. Desy Jr.
280 million shares now?
So it looks like on top of the 210 million shares already out there, another 70 million shares are going to be issued.
While I did not think things were going well for the company when I sold out a while ago, I did not think it would get this bad.
It is too bad that the company did not make some kind of deal with VRNG when all of the IP stocks were doing well.
Of course, no one could have predicted how in rapid order the big IP lawsuit stocks all would have gotten trashed. (VRNG with losing on appeal, VHC on wandering, WDDD with the Bulger delaying the trial until after the other problems had time to take place.)
Louis J. Desy Jr.