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.
DNC is over and no serious disturbance. The RNC is soon and if it is also uneventful, that should help the general market and by extension IDCC. If a Muslim force fights the insurgents in Iraq, that would also help. Add that to a good earnings report and another licensee and it would make a nice brew.
A more upbeat scenario: In the short term, when we get over the DNC by next Friday and then the RNC by next month without any "incidents", things will look up a bit.In the longer term, Bush will probably win and after the election we can see a nice close to 2004.
Nok is writing the book on how to circumvent a valid contract by raising spurious issues and using delaying tactics in arbitration. Other lawyers will study this and arbitration between large companies will not be quite the same.
3G: I doubt that IDCC would have to pay Ericy more than the rate they are paying us for IPR and since this is below its real market value, then IDCC would be receiving some value from this option.
The analogy between IBM's former problems and Nok's current ones goes only so far. Technology in P.C. hardware was not changing as fast as handset technology is now. This gives Nok, with its huge assets, an opportunity to take some risks and get out in front of its competitors with cutting edge technology.
Nok is a victim of its own success. They got too fat and conservative in a rapidly changing market. Now NOK has to go back to being an innovator and a risk taker. They are well positioned to reframe their strategy considering their market share, their cash position, and their organization.
Nok has to now play catch up. To do this they can not rely on shifting gears in style alone. They have to be at the forefront with 3G technology. For relatively small sums of money(considering the scale of Nok revenues), it is in their interests to have Idcc as a value added partner rather than an opponent.
P.S. thank you TC for your confidence in Idcc and having the courage to state publicly what you think.
Old Dog: What is holding up the negotiations is that both sides are confident. It is in Nok's interest to drag this out and they have been doing so. The evidentiary hearing is scheduled for less than 6 months from now and it seems that we are on track to get a good resolution, after which the dominoes should start falling into place. This fight with Nok is like a war. We are the soldiers and management are the officers. We feel loyal to the company and our moral would be higher if our officers showed their loyalty also, especially right before the big battle.
Loop: Law is a kind of glue for society and you are a kind of glue for this board. I am sorry for the loss of your friend,RTD. I hope that as time passes, you visit us now and then.
Osoesq: I have wondered whether NOK's tactics in stalling the arbitration process might go a long way towards setting an example, which could undermine the concept of arbitration. Why resort to arbitration if the process can be delayed using strategies similiar to those used in court cases ? "An arbitration clause is usually added to a contract to allow for "expeditious" resolution of disputes."
What is hurting Idcc now is the perception on the street that Idcc has to clear a major hurdle, the Nok arbitration, which if it fails to do, it may be consigned to the scrap heap of history. Neither Oracle nor Qualcom face this problem so their insider sales are not so damaging. When Idcc has insider sales, whether in small or large quantities, this stimulates the street to reconsider the risks that Idcc might fail to clear this hurdle. This discourages buyers and encourages sellers, especially short sellers. Management is aware of this and may, nevertheless, if history is any guide, sell again before the resolution of arbitration. This does not exactly accomplish the "aligning of interests" of management and shareholders that Campagna spoke of recently. I feel the odds are greatly in our favor that we will pass the Nok test and I am holding, putting my entire financial future and that of my family on the line. I would like Idcc management to display the same confidance that I have.
Management's selling at this time seems inconsistant with Idcc's business plan. Prospective licensees are holding back because of uncertainty about the outcome of the arbitration with Nokia. By selling now, Idcc management is signalling that they too are uncertain about the results of this arbitration. This will discourage at least some of the prospective licensees from signing up until after the arbitration is resolved. This could put pressure on Idcc to settle the arbitration on less favorable terms before the panel makes its decision.
The potential for abuse when managers of public companies sell their shares is great. This is the reason that the SEC has rules for insider trading. The shareholders could profit from insider trading in the following way. Before insiders dump their stock on the open market, the company would have the option to have buy the stock at a price equal to the average price for the preceding year. If an independant management committee did not want to excercise this option, then the stock could be sold on the open market. This would tend eliminate management's manipulating the price in the weeks before they sold and give the public an idea of management's appraisal of the value of the stock by their decision to buy the stock or not.
It was a nice courtesy to Merritt that Campagna allowed him to sell first. They both understood that this would depress the stock price. This saved Merritt almost $20,000. When Campagna sold, he received less for his shares since the price had already been lowered because of Merritt's sale. I'm sure that next time Merritt will return the compliment and let his boss go first. Too bad the public isn't in a position to receive such gentlemanly courtesy. I suppose the public should be grateful that we can buy these guy's stock with our hard earned money. Perhaps if they bot some stock with their hard earned money, the interests of management and shareholders would "be better aligned" as Campagna says.
Idcc is just a crap shoot until we license 3G. Merritt doesn't want to play crap with his assets. Those of us who do want to shoot crap should just sit there until we make our point.(or crap out)Merritt's sale today doesn't affect this one way or the other. Meanwhile we shouldn't allow Idcc to take money off the table by granting more options and RSU's until the game is over.
Setting the hearing date for the Samsung arbitration at the end of February does not mean that the Samsung panel will hand down their decision at the end of February. They could wait until the Nok arbitration panel hands down its decision before they make theirs.
Nok has signed a license to use Idcc's IPR at a rate to be determined. They say the validity of the patents is not being challenged. The two issues remaining are whether Ericy is a trigger and what the rate should be. I fail to see how the unchallenged validity could possibly be relevant to the arbitration proceedings. What am I missing here?
The main plus for Idcc in 2G was in having the experience of making all those mistakes in licensing, the repetition of which they will now know how to avoid for 3G. Idcc has accumulated assets including IPR, people, and cash and they now know how to play the game. The Sanyo license is great because it is a model of where to go in the future.
The Nok license was a challenge. The challenge was that Idcc had to sign just one of the named triggers, not all of them, and then Nok would pay the same rate. We thought we met the challenge with the Ericy signing. The arbitrators will make the final decision on that. If the arbitrators decide against us, we should have lawsuits prepared, involving at least one more of the other named triggers, all of whom are infringing.They should be ready to be put into effect as soon as we hear an adverse decision from the arbitrators. We have already initiated a suit against Lucent and this was a good move. If we have the IPR we seem to have, we should win. In the meantime, we should keep our cash reserves high to support the legal costs of these critical suits.
Recognition of the risks of a possible loss to Nok in the current arbitration has been recently heightened, rightly or wrongly, by the adverse decision of judge Lynn to reverse vacatur. A suit against another major infringing OEM(successful conclusion to which would also act as a trigger for the Nok license) would have the affect of diminishing the importance of a loss to Nok. Attention would be then rightfully deflected from the short term losses in 2G to the potential long term gains in 2G and 3G. This is already the case in the suit against Lucent but would be enhanced by an additional suit.
Judges take pride in not having their important decisions reversed by appeals courts. In the Nok arbitration, hundreds of millions of dollars are involved. Nok has asserted that the arbitration is linked to and dependent on rulings and documents from the Ericy case. True or not, Nok was going to appeal an adverse decision. The arbitrators were probably not going to make a decision until the appeal was resolved. However, assuming the arbitrators, not having seen these documents, did find in favor of Idcc and afterwards Nok won the appeal, it would not only be a serious blow to the prestige of the judge, but Nok might even try to appeal the arbitrator's decision because of the "unusual situation". It is really best for Idcc to get these rulings and documents out on the table for all to see.
"After this failed negotiation, the waters were muddied by Nokia with their petulant rantings and allegations of insider trading by IDCC management. Sounds like the desperation efforts of a company trapped by an ironclad contract." IMO this charge by Nokia was the first shot in an effort to portray Idcc management as unethical and to nullify Ericy as a trigger on the basis that the setttlement with Idcc was part of a fraudulent effort to stick it to Nok by putting a low royalty rate on the infrastructure and a high rate on the handsets. In a odd way, the decision of the judge to reverse vacatur(and eventually, I'm sure, to make the rulings available to the arbitrators) will show the rational for Idcc having to give Ericy a lower rate for infrastructure, which was hurt by the rulings than for the handsets, which came out better under the rulings.
The Ericy lawsuit was not just about money but also about recognition and now the Nok arbitration is about the same. If we do not win the Nok arbitration, we may get this recognition through a win in the Lucent case or we may need to get it through a suit against LG or some other major infringer. I do not see us signing another tier one OEM until we get it. IMO this is where our assets should be put to use, not in stock buybacks. I know that this policy involves risk. However, assuming our IPR is as good as it is billed to be, this may be our best shot.
The judge has taken the interesting position that the Idcc-Ericy settlement was on the basis of a joint agreement to petition for vacatur rather than the actual granting of vacatur. Therefore her reversal should not affect the settlement. I also think she was mislead by Nokia which stated that "the erroneous vacatur unjustly prevented Nok from arguing before the arbitration panel that the court's Markman and summary judgment rulings affect Nokia's obligations under the license agreement". To the contrary, Nok had already signed a license and the issues in dispute are whether the royalty rate has been triggered by Ericy and whether the rate Ericy agreed to pay should be Nok's rate as the contract seemed to state. Arbitration is about the royalty rate, not the validity of patents and claims that the court was dealing with in the Ericy case. I doubt that our lawyers made this clear to the judge.
osoesq: Do you believe that now that Judge Lynn has reversed herself on the vacated rulings, the arbitrators would reach a decision without seeing those rulings?
If Idcc had handed over the documents and rulings to the arbitrators at the start of arbitration, it might be over by now. It looks like we'll have to do it anyway so why don't we do it now. If this introduces too great a risk that we might lose, lets negotiate and get what we can and get out.
In the case of Qcomm, by allowing them to sublicense, Idcc essentially sold the patent to them instead of just licensing it.
"Even if there is an appeal, I do not think anybody wants any further delay (other than perhaps Nok), so the arbitration may still go ahead in Jan. '05 even if an appeal is pending" Idcc could produce the vacated rulings for the arbitrators even while the appeal is pending. Nok would claim that the issue had become moot but Idcc could point to the ramifications beyond this specific arbitration.
the May 21, 2002 Order granting Ericsson's Motion for Summary Judgment of non-infringement based on the Single Base Station Limitation may explain why Idcc was willing to accept a lower rate for infrastructure than for handsets.
I used to think Idcc's future lay entirely in the hands of the Nok arbitrators. Since Sanyo, I'm not so sure. Best to keep some powder dry until the resolution of arbitration. If Idcc wins, try to jump in quick and pay 5 to 10 points more before the rocket really takes off. If Idcc loses, wait until the big gap down and buy many more shares for the same cash. Win or lose, Idcc is going to be here for a long time.
Jim: Yes. I taped that interview with M.G. and I still have it
Now that we have new board members, does each of them get to be given a treat right away with the same goodies that Roath got or do they have to wait around a bit?
Management is pursuing a hard line with potential licensees and rightly so. Unfortunately, this involves risk. Management would rather be awarded stock thru options or RSU's and then sell, guaranteeing that whatever happens, they will come out on top. Management of this relatively small company should be fairly compensated. For exceptional compensation they should await exceptional growth of the company which would also reward the shareholders. This would be the proper "alignment of interests" that they have advocated.
"Yup, the institutions. My guess is that they will vote for Mr. Roath. If they have an issue with the RSU they can bring it to the attention of management directly. They don't need to use protest votes to get a company's attention."
Institutions already brought it to management's attention when they voted against additional options. Management ignored them. Now they have to vote against Mr. Roath if they wish to have any input at all.
Delay of the arbitration decision into 2006 would be tantamount to a win for Nok. If there is a reasonable possibility of this happening, Idcc should initiate a 3G infringement suit against a major OEM immediately, testing their most important IPR. This is a crucial time for Idcc.
O.T. The case against Grasso as outlined by Spitzer is essentially about conflicts of interest and inappropriate awarding of compensation by a board neglectful of its duties. Spitzer says that if this is an example of how boards behave, then the whole system of corporate governance needs to be reformed.
Prior to announcement of the Ericy settlement, Nok had totally ignored Idcc, making no mention of their contract and pretending Idcc didn't exist. Meanwhile Idcc kept a low profile, not objecting to this treatment. Idcc's claiming that Nok now owed substantial sums was Idcc's way of announcing that the game had changed and Idcc was coming out from underground. If anyone was remiss in that episode it was Nok for the way they handled Idcc. In retrospect, I doubt that Nok would have paid without being forced to regardless of what Idcc said.
Recent actions of management in rewarding themselves while the stock is going down involve more than just monetary considerations. They reach into the areas of their fiduciary responsibilities and ethics IMO.
Ronny, the answer is that Idcc does not want to risk a Motorola style loss in court on the most important of its patents. It would prefer to depend on the arbitrators to come up with a fair resolution which would then induce others to sign or at least serve to impress a jury in subsequent court cases if needed.
Jai, In response to" So why wait 9 months while LG drags their heels hoping Nokia wins. We got cash and Fullbright so I'd go after them now" I have long suspected that Idcc has an informal agreement with Ericy that they will sign for 3G if and when Nok pays for 2G, thus validating that Ericy is a trigger for the Nok contract. This way, Ericy will not be at a competitive disadvantage with Nok for 2G or 3g. I believe that if Idcc thought there was a significant chance they would lose the Nok arbitration, they would have already started suit with Ericy or other major OEM's over 3G. They expect that when Ericy signs and Nok pays, others will follow. If I am wrong and Ericy still won't sign, then we would need to sue.