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Nok and Idcc have similiar interests
Nok has announced to the world that they intend to keep royalty rates low. Idcc has made it clear that they are willing to play the role of a discount patent company. In the long run, it is in Nok's interests to support Idcc in this role.
mschere, about the tantivy patents
My take from the CC was that for CDMA 2000, some of the Tantivy patents, which appied to specific applications, went well when combined with IDCC patents which were foundational and in this case the whole might be more than the sum of the parts.
Marchma, NOK's claim that their obligation under the contract has been discharged refers to development payments, not patent royalty payments.
Reasons why board has gone downhill lately
IMO the main reason is that a rash of messages from board members, which are harsh and personally insulting to another board member, has turned off some of our best contributors. Usually the insulter and insultee both tend to cease messaging and the board is the loser. Another reason is that IDCC is so withholding of information, much of which belongs in the public realm, that there is often very little to discuss. Although we are apparently unable to influence IDCC to be more open, at least we can be civil to each other and help the board in that way.
Norfolk: sorry to hear about your Dad
He will probably need one or more coronary stents or a bypass. If the stents are used, the new DES coated stents are superior to the older non coated stents because they have a much lower restenosis rate. Their price is, however, 2 or 3 times more to the hospital than the non coated stents. The FDA approved stent is the CYPHER made by J and J. It might be worth asking your Dad's doctor's about this. I don't mean to be intrusive but I thought I would pass this along.
Rip's smiling is nice but:
I'm more impressed by Bill Nagovitz of Heartland spending over $200 thousand of his own cash to buy Idcc stock.
sailfree:good question
you wrote "If there is nothing damaging or possibly damaging why is IDCC resisting turning over the sealed doc" I wonder about that myself. Possibly Idcc suspects Nok would seize upon some obscure document which they would use as a basis for further complaint and delay. Clearly Nok has no intention of paying just because the documents look OK. If they can find anything the least bit arguable, they will use it for their purposes.
Sailfree
If a contract calls for binding arbitration and one of the parties refuses to arbitrate, I believe the other party can petition the court for a settlement according to its own terms.
It has been seven months since the March court date Idcc was to have had with Ericy and, yes, the expected appeals from that case would still be going on. We have not started arbitration which usually takes about a year so I am not sure which would have been concluded first, the present path to arbitration or an Ericy appeal. The rewards of a court win over Ericy would, I believe, have been far greater than what we received in our settlement with Ericy and Nok would then have had to pay us much more than they will have to pay even if we win this arbitration. Additionally Nok would not have had a chance to rat out as they did.
As far as Idcc not wanting to reveal what is in the sealed documents, I have no idea what that is all about. I personally feel there is nothing damaging there and that Nok is on a fishing and delaying trip.
TC
If the 1999 contract with Nok had contained the following clauses, I would be more comfortable with the assumption that Nok agreed to the essentiality of the patents.
1. "In any event the royalty rate will not be less than .1%"
2. "In any event the royalty payments will start not later than 1/1/03"
I'm sure that these clauses were discussed and rejected by Nok in 1999 and Idcc AGREED to go ahead without them. Now binding arbitration has been successfully stalled by Nok for 4 months without even the selection of a panel. Since Idcc has apparently not sued to start arbitration, must we assume that they AGREE to this delay? We can guess that if and when judge Lynn disallows the unsealing of the Ericy documents in the hearing on 11/24/03, Nok will appeal. Will Idcc sue to start the binding arbitration or AGREE to further delay?
Recent events have confirmed my old impression that a court decision against Ericy was necessary to empower Idcc and even if Ericy went bankrupt as a result and never paid Idcc, Idcc would still have been better off in the long run. I am now thinking that we still need that decisive court decision. We better not spend our precious cash reserves with stock buy backs in the meantime.
Sailfree
The "license" with Nok came out of a dispute about essentiality. The parties decided to let the Idcc-Ericy suit solve the dispute and they left the rate up in the air with the possibility that it could be zero if Ericy won big. When Ericy lost, Nok began looking for ways to rat out of the agreement. In retrospect, it was a deal Idcc never should have made. A suit against Nok would have been better although Idcc may have felt they did not have the assets to pursue two major suits at once at that time.
Sophist
I have had the feeling that the important decisions in this small company are made right at the top. I recall that M. Gercenstein, who was really knowledgable and experienced in the technology area and also had a lot of management experience was shot out of the company, like from a canon, when he didn't fit in. The person with the detonator at that time was the same guy who, for better or worse, is still calling the shots, perhaps now with some probably conservative (maybe too conservative) advice from his number two. With all due respect to lawyers, they are better at telling you what not to do rather than what to do.
Sophist
You wrote" I believe current management has a better feel for the industry they are in, with exponentially more contacts with industry insiders (both friendly allies and competitive foes) than the entire bunch of posters on this board combined."
When you mentioned current management,were you refering to H.C. or H.G. or both?
Additional goal of Nok in dispute with Idcc
6. to weaken Idcc and then buy it cheaply
I agree that the interests of the shareholders demand an aggressive posture at this time. If we fail against Nok, management can do OK with IDCC continuing as it has in the past, richly rewarding itself amidst partial disclosures and hopefull predictions, but we, the shareholders, would be best served by a change in management or even a sale of the company. I believe we have the "engine and the transmission" but now we need a gas pedal.
Nok goals in arbitration with Idcc
Nok would like a low rate or no rate for 2G AND for 3G. I have thought of the strategies that that they might pursue to achieve these ends by a decision of the arbitration board or even better by a favorable settlement without such a decision. Some of the strategies they may be using:
1.Nok brings to public awareness Idcc insider trading issues, which may be uncomfortable for Idcc management.
2.Nok wants vacated PSJ of Judge Sanders to be opened.
3.Nok wants to see if there might be ILLEGAL collusion between Idcc and Ericy against the interests of Nok.
4.Nok wants to slow Idcc momentum hoping that other payors to Idcc will balk and thereby force Idcc to accept a low rate for 3G. They do not want Idcc to become another Qualcom that they might have to deal with.
5.They will stall as much as they can and in any way they can, figuring that they have nothing to loose and delay may bring on events that could force a favorable settlement from Idcc.
Weakening of the concept of arbitration
Regardless of what happens on 11/24/03, the concept of arbitration as an efficient proceedure for settling disputes has been weakened by the recent moves by NOK. NOK has succeeded in demonstrating a technique whereby arbitration can be delayed, possibly indefinitely, by requesting that the courts make various rulings BEFORE arbitration begins. This takes away the main advantage of arbitration and suggests that it might be just as well for disputes to be brought directly to the courts.
Arms, this may be short term momentum trading
When the market was way up this morning, momentum traders may have been disappointed with the relatively small run up in the price of Idcc. When the tide turned, these traders sold their long postions and may have shorted, figuring the next move was down. We will see if this extends into tomorrow. Whether it does or not, it has nothing to do with the long term value of Idcc IMO.
Petersimon, my take on the hearing date is
Judge Lynn wanted to give Samsung time to file court papers and then she wanted to handle both Nok and Samsung requests at same time. I believe she will deny the requests to unseal and will present well thought out and convincing reasons which may make an appeal by Nok and Samsung look like a transparent delaying tactic. The November 24 date which is about when I expected it to be may present a real win for Idcc although there may be some further delay before she announces her decision.
The arbitration panel could proceed with the understanding that if the judge rules in favor of unsealing the documents, the arbitration could be suspended pending the receipt of the documents. In the meantime, all issues not related to the documents could be dealt with. If the judge rules against opening the documents, the proceedings could be brought to a close in a reasonably short time.
Jai, I think you make sense
I think that more litigation is on the horizon. I did not like the Idcc stock buyback. I felt then and still do that the cash should be used to project financial strength and support litigation. The future of Idcc depends less on right and more on might. I believe we have both but we may have to stress the latter.
Idcc Samsung Arbitration called for Samsung to get the SAME benefits as Nok under its licenece with Idcc. I did not take this to mean that because the Nok royalty rate for the period after 1/1/02 was as yet undetermined, Samsung would be entitled to pay NOTHING for this period until such time as the Nok rate was determined. I see that most posters are convinced that Samsung DOES have this entitlement. I'm still unsure on this point.
Possible Idcc rational for pressing Samsung
Lets take a worst case scenario in the Idcc Nok dispute. The arbitration panel decides that Ericy does not qualify as the OEM mentioned in the 1999 licence (very unlikely IMO). In this case, the Nok royalty rate remains open indefinitely. This should not release Samsung from their responsibility to pay Idcc for 2G according to the terms of their own licence. Only when another OEM has licenced with Idcc for a LOWER rate do Samsung MFL rights kick in. I repeat: It is a LOWER rate that matters, not an undetermined rate.
Differing perspectives in Idcc Samsung dispute
In a bizarre twist, Idcc seems to be saying to Samsung that since Nok has not agreed to a rate after 1/1/02 while the matter is being arbitrated, no licence with them for that period (after 1/1/02) exists. Therefore, although the MFL clause in the Samsung agreement allowed them to pay no more than the NOK rate prior to 1/1/02 it does not excuse them from paying at least what the Ericy rate is in the period after 1/1/02.
Samsung is saying that the Nok rate (to be determined by arbitration) is in fact a rate and they should pay no more than Nok's rate and NOT UNTIL until that rate is determined.
What it boils down to is the question,"Is a licence without an established rate really a licence at all or does it become a licence only when a rate is set?" In this case, Idcc seems to be saying there is no licence between Idcc and Nok until the rate has been established and therefore Samsung's MFL protection can not kick in until that happens. Samsung is saying there is indeed an Idcc-Nok licence even without an established rate.
Looking at it that way, I might just lean towards Idcc's argument. The only problem is that the Idcc Nok rate will have probably been set before the Samsung arbitration has been concluded. At time the whole question becomes moot. With that in mind, I still don't understand why Idcc is pressing the issue at this time.
Futility of Idcc-Samsung arbitration
When the Nok dispute is settled, either at the conclusion of arbitration or before, this will automatically trigger a Samsung rate. Therefore the Samsung arbitration's only practical effect is to delay, for a few weeks, Judge Lynn's decision re the unsealing of the documents and thereby the arbitration. Why doesn't Idcc just agree with Samsung to put their problem on the backburner until the Nok situation is resolved?
AMS, the following is my take on this
My assumption now is that Samsung decided at this time to seek arbitration so they would have an excuse to file a request with the court to unseal the documents pertaining to the Idcc-Ericy litigation. This will have the effect of delaying arbitration while the invoved parties submit briefs and rebuttals. It may be part of the collusion between Nok and Samsung to make things as uncomfortable as possible for Idcc and force a favorable settlement on 3G royalties from them. It does look as though it will delay arbitration for another month or two but not more than that. It would be interesting if at some point Idcc could raise the issue of an anticompetitive conspiracy here.
Difficulty in using posts to make investment decisions
"arbitration in the Nokia and Samsung matters isn't expected to be good for InterDigital, which seems to make much of its money from suing other companies over its patents. At the very least, an arbitration seems likely to limit the windfall InterDigital fans were expecting."
This is a very negative post. It is from a poster whom I have considered to be intelligent and knowledgable. No one knows for sure the conscious or unconscious motivation of any poster, but we need to be especially careful about basing investment decisions on posts that are very negative in downdrafts or positive in updrafts. It is in these situations that traders make money at the expense of those who panic and go with the flow.
Question of antitrust behavior of Nok and Samsung
The only reason for Idcc pressing Samsung that I can come with is the desire for Idcc to highlite the anticompetitive efforts of Nok and Samsung in their collusion to keep royalty rates down.
Samsung arbitration is a non event
Samsung will pay when Nok does. I never saw any reason why they should pay before the outcome of the Nok arbitration. Wouldn't Samsung have looked foolish if they had paid and then Nok didn't have to? I do not understand why IDCC is pressing this issue, which was going to resolve itself anyway, when there are so many other more compelling targets to initiate litigation with for 3G infringement.
Longball and Dndodd:
Nope. I don't own GLGS. You've got me confused with someone else.
The Hua-Inf deal is the best news we've had all year. Unlike the Nok deal announcement, this was real with no ifs, ands or buts. It is significant, it is 3G, and it will produce revenues. W.S. was really in sleep mode not to pick up on this. Once they wake up, they'll wonder why they missed it. IMO this 3G stuff is more important than a rotten settlement with NOK.
Rumors
The rumors that Jimlur has railed about deal with predictions of future events. This is especially a problem if the poster is interested in a quick rise or lowering of the price. A recent rumor was the early tip that HL was about to downgrade Idcc. I do not believe this rumor had anything to do with any poster hoping to gain from it. Nevertheless, it turned out the next day to be true and I'm sure some of the readers of this board took advantage of this rumor by selling or shorting the stock into the consequent slide and their repurchase or covering may have been a factor in the "hammer" yesterday. The report about discontent in the rank and file is hearsay but is just as believable as the rumor about HL. IMO It will not affect the price and was not for any personal gain but is to expose a problem at Idcc that definately needs fixing .
Marchma
I've long felt that the disparity between the rewards reaped by management through their overly generous option deals was out of line with what was being parsed out to the rank and file. I've suspected that this situation had to have a negative affect on the morale of the rank and file. I appreciate your confirmation of my suspicions. I agree with you and Tom Carpenter that we need new leadership in the not too distant future for this company to achieve anything approximating its potential.
Well said L2V
I have been thinking the same thing. Right now we are in a street fight with Nok(e.g. the kick in the face that Nok delivered with the smear that Idcc management was guilty of inapropriate insider trading). Right now we need a street fighter like H.C. Later on, I agree with you that it might be well for H.C. to gracefully exit.
Loop
Is it not also true that Nok is responsible for promoting WTDD, which is something they have failed to do? Does not this failure then excuse Idcc from completing the project until they fulfill their part of the contract?
Marchma, I have to disagree.
With your knowledge of accounting, your obvious intelligence, your ability to gather and organize facts and your integrity, you would make a tremendous addition to the BOD. I think other investors and the street would feel the same way. I would be willing to vote for you and to help in any way I could to see your election happen. I doubt that the present board would be happy since you might upset their clubby ways.
Loop
"I still do not understand the reasoning of our PR and CC breaking the seal on the confidentiality that had been rammed down our throats over the previous 4 years."
Perhaps after all those years of Nok never mentioning Idcc in all their IPR and doing their best to distance themselves from Idcc and to pretend that they didn't exist, Idcc had a right to do as they did.
Why Idcc failed to go to 18 yesterday:
On 7-22 Idcc closed at 17.71 and then meandered around the 17's and 18's before heading back down to the 14's. Many longs who did not sell during the period of the gap down and right afterwards probably felt frustrated and made the decision to sell when the stock returned to the high 17's. Idcc did return and held there at decent volume for about 4 hours on friday right up to the close. Many of those who intended to sell, probably did so at that time. Now we can move ahead if the general market does well or if we have some positive news. (note: I can't compete with gejim as a technician but I anticipated this one happening.)
Idcc response cleared up some important questions:
Q. Would Sony/Ericy rates qualify to set Nok rate?
A. "Nok agreed (in the 1999 contract) that its royalty obligations would be determined by the financial terms of any future license to Interdigital's patents taken by certain named major competitors (as well as their successors, assigns, and asset purchasers)"---on page 2
Q. Were the PSJ's vacated?
A. "the relevant orders construing the claims of the Interdigital patents that were at issue in this case were interlocutory, and have all been vacated."---on page 10
The issue concerning the possible warranty was not alluded to in the filing. I doubt that it exists since:
1. It is very unlikely Idcc would have settled if it had existed.
2. Idcc went through a long mediation. This would have been cut short if the mediator, who saw the contract, had spotted that clause. The logical question she would have posed to Idcc would have been,"Why are you mediating this when you know that it will eventually go to a jury?"
Bill, life has its peaks and its troughs. I hope you and Carol emerge from this trough in the sunlite and climb to the peak again. Keep up hope. Even though breast cancer can be a formidable foe, it is not the most formidable and is often beaten.
Loop: re Nok allegations of insider trading
There are two possible faults with Nok's allegations. First there is a question of whether they are slanderous. I could understand that this might be protected because it was announced as part of a plea. However if this could be shown to be part of an inappropriate negotiating scheme (i.e. blackmail), would it also be protected?