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<<Stilling looking for the 8K on yesterdays news. May not get it until tomorrow. They have 4 days.>>
I was wondering if they can put the information in the upcoming 10-Q
(in subsequent events) in lieu of the 8-K. I'm really not sure at
all but we'll know soon enough.
But, what we do know, is that IDCC has always issued the 10-Q on the
day of the earnings release.
The Xiaomi litigation was nasty! It's good to get these court litigators off of the payroll. But the Lenovo litigation nasty as well - at least IDCC recently had a big win there in the UK!
Xiaomi
China Proceeding
On August 5, 2020, the Company was informed in writing by Xiaomi Corporation ("Xiaomi") that, on June 3, 2020, Xiaomi Communication Technology
Co., Ltd. and certain of its affiliates filed a complaint against the Company and one of its subsidiaries in the Wuhan Intermediate People's Court (the "Wuhan
Court") seeking for the Wuhan Court to determine a global FRAND rate for a license to the Company's 3G and/or 4G/LTE SEPs. The Company was informed on
September 25, 2020 that the Wuhan Court held an ex parte hearing on or about September 23, 2020 and issued an order that, among other things, enjoins the
Company from seeking a preliminary and permanent injunction against Xiaomi and certain of its subsidiaries for infringement of certain of the Company's patents
related to 3G and/or 4G/LTE standards in the Company's case in the Delhi High Court discussed below, or elsewhere. The Wuhan Court ordered a fine of up to one
million yuan per day if the Company were to violate the order. The Company contends that it has not yet been properly served with Xiaomi's complaint or the
Wuhan Court's anti-suit injunction order. On October 13, 2020, the Company filed an application challenging the jurisdiction of the Wuhan Court to take up
Xiaomi’s complaint. On March 12, 2021, the Company’s Chinese counsel was orally informed by the Court that the Company’s application challenging
jurisdiction of the Wuhan Court had been rejected. The Company has not yet received the written decision but is challenging the decision at the IP Tribunal of the
SPC.
On September 30, 2020, the Company filed a preliminary conditional response seeking reconsideration of the Wuhan Court's anti-suit injunction. In a decision dated December 4, 2020, the Wuhan Court dismissed the Company’s reconsideration petition. The Company is challenging that decision at the SPC.
India Proceeding
On July 29, 2020, the Company and certain of its subsidiaries filed two patent infringement actions in the Delhi High Court in New Delhi, India (the
"Delhi High Court") against Xiaomi and certain of its subsidiaries. The first complaint alleges infringement of five of the Company's patents related to 3G and/or
4G/LTE standards: Indian Patent Nos. 262910; 295912; 298719; 313036; and 320182. The second complaint alleges infringement of three of the Company's
patents related to H.265/HEVC standards: Indian Patent Nos. 242248; 299448; and 308108. In these proceedings, the Company is seeking compensatory and
punitive damages for Xiaomi's infringement of the asserted patents. The Company is further seeking, among other remedies, interim and permanent injunctive
relief to prevent further infringement of the litigated patents in India, unless Xiaomi elects to take a license on terms determined to be FRAND by the Delhi High
Court. The Company’s application for interim injunctive relief remains pending.
On September 29, 2020, the Company filed an anti-anti-suit injunction application against Xiaomi in the Delhi High Court, seeking, among other things,
to enjoin Xiaomi from enforcing the Wuhan Court's September 23, 2020 anti-suit injunction order described above. On October 9, 2020, the Delhi High Court
granted the Company's motion and issued an ad interim injunction restraining Xiaomi from enforcing the anti-suit injunction order issued by the Wuhan Court,
pending further consideration of the Company's application for an anti-anti-suit injunction at a hearing on November 25, 2020. On May 3, 2021, in an oral
pronouncement by the Delhi High Court, the interim anti-anti-suit injunction was made permanent throughout the pendency of the Indian cellular case.
Furthermore, the Delhi High Court stated that, if any orders or other measures are passed by the Wuhan Court related to the anti-suit injunction that result in the
Company incurring a monetary penalty, then Xiaomi must deposit a corresponding, equal amount with the Delhi High Court for the Company's benefit within one
week.
German Proceeding
On October 30, 2020, the Company filed an anti-anti-suit injunction application against Xiaomi in the Munich District Court, seeking to enjoin Xiaomi
from continuing to pursue the Wuhan Court's September 23, 2020 anti-suit injunction order described above with respect to Germany. On November 11, 2020, the
Munich District Court granted the Company's motion and issued an ex parte injunction restraining Xiaomi from enforcing pursuing the anti-suit injunction. The
Company filed penalty requests for non-compliance with said court order. Xiaomi opposed the injunction and requested stay of enforcement, and an oral hearing
was held on January 28, 2021. At the hearing, the Munich District Court dismissed the request for stay of enforcement. On February 25, 2021 the Munich District
Court confirmed its earlier ex parte anti-anti-suit injunction against Xiaomi. This judgment was appealed by Xiaomi to the Higher Regional Court Munich.
On April 27, the Company was informed that the Munich Regional Court commenced service of three patent infringement actions filed in Germany
against Xiaomi by a subsidiary of the Company. The complaints involve infringement of the Company's German patents related to 3G and 4G cellular handsets
(Patent Nos. EP 2,421,318; EP 2,485,558; and EP 3,355,537). The Company is seeking injunctive relief to prevent further infringement of the asserted patents in
Germany.
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001405495/a33fab54-1d83-4342-9e70-93f1a147bbae.pdf
orientbull, I'm always trying to err on the conservative side of
these estimates.
Secondly, we should assume that IDCC isn't going to eclipse
their $500M + goal for recurring revenue for smartphones
by too wide of a margin.
It's on slide 14 from the Sidoti conference about five months ago:
<<Drive core
smartphone
recurring
annual
revenue base
to $500M+>>
https://s25.q4cdn.com/626766191/files/doc_presentations/2021/IDCC-Investor-Presentation-Sidoti-Conference-March-2021.pdf
So last quarter recurring revenue was $78.6 million - let's call that
$320 million per year before Xiaomi. Of course Lenovo needs to settle
as well. I think Lenovo is the main litigious holdout - please point
out who else if anyone else knows.
The bottom line is that $180 million in incremental revenue is a heck
of a lot of profitable revenue. So I guess that you're right - if
the lion's share of incremental revenue comes from Xiaomi and Lenovo,
Xiaomi could indeed be paying $75 million or so annually!
The Xiaomi licenses includes 5G! (eom)
<<The patent at issue is European (UK) Patent No. 2,485,558.>>
my3sons87, thanks for the article.
It looks like the '558 patent is good until Jan 31, 2027:
https://patents.google.com/patent/EP2485558B1/en?oq=+2%2c485%2c558
So now that the patent still has some good life left in it, we
can start thinking about an injunction against Lenovo since it's
valid and infringed.
Don't forget Unwired Planet!
<<The patents in suit are European (UK) Patent Nos. 2,485,558, 3,355,537, 2,421,318, 2,363,008 and 2,557,714.>>
I just Googled all of those patents under Google Patents - here's an
example:
https://patents.google.com/patent/EP2485558B1/en?oq=InterDigital+UK+2%2c485%2c558
I found that all of the expiration dates appear to be between
2026 and 2029. I find this to be really good news because
we're apparently NOT dealing with a patent that's already expired!
And, as we know, under Unwired Planet, the UK isn't afraid to impose
injunctions!
<<Patent-in-suit found to be valid, infringed and essential to the 4G LTE wireless standard by the UK’s High Court.
Decision underlines the value of InterDigital’s wireless patent portfolio.>>
dws, thanks - this is a big deal. I guess that the stock is off a lot
of people's RADARs. If more people were paying attention, I think that
it should be up more than 70 cents right now.
With the above being said, it'll be important to figure out the patent
number an its expiration date. This is from the most recent 10-Q:
<<. LITIGATION AND LEGAL PROCEEDINGS
COURT PROCEEDINGS
Lenovo
UK Proceeding
On August 27, 2019, the Company and certain of its subsidiaries filed a claim in the UK High Court against Lenovo Group Limited and certain of its subsidiaries. The claim, as amended, alleges infringement of five of the Company's patents relating to 3G and/or 4G/LTE standards: European Patent (U.K.) Nos. 2,363,008; 2,421,318; 2,485,558; 2,557,714; and 3,355,537.
The UK High Court held case management conferences on October 6, 2020 and December 16, 2020, a disclosure hearing on January 19, 2021 and pretrial review hearings for the first trial on January 28, 2021 and February 8, 2021. At those hearings, the UK High Court entered a schedule for the technical and non-technical FRAND proceedings. Two technical trials were scheduled for March 2021 and June 2021 and the non-technical FRAND trial is scheduled in January
2022.>>
Yes, but it looks like Centripital is losing at the PTO's PTAB:
https://www.law360.com/trials/articles/1382651/fed-circ-iffy-on-nixing-cisco-s-ptab-wins-in-centripetal-row
Xiaomi and IDCC - Indian court halts Chinese order:
Paulee, thanks for the informative article.
U.S. agrees to remove Xiaomi from blacklist
----------------------------------------------------------------------------
This could help IDCC - at least it won't hurt. Don't forget
that a Chinese court was going to fine IDCC about $150,000 per day.
And an Indian court said that if the Chinese court did that they
would fine Xiaomi the same amount.
Part of this could be due to retribution for what the USA was doing
to Xiaomi.
---------------------------------------------------------------------------
MAY 12 20214:03 AM EDT
In January, the administration under former President Donald Trump designated Xiaomi as one of several “Communist Chinese military companies” or CCMC.
That restricting American investors from buying shares or related securities of any companies given this designation.
On Tuesday, the U.S. Department of Defense agreed to remove the designation from Xiaomi.
GUANGZHOU, China — The U.S. has agreed to remove Xiaomi from a blacklist that would have barred Americans from investing in the Chinese smartphone maker.
Shares of Chinese tech giant Xiaomi rallied as much as 6.5% after the news, before paring some gains.
In January, the administration under former President Donald Trump designated Xiaomi as one of several “Communist Chinese military companies” or CCMC.
This meant the world’s third-largest smartphone maker was subject to a November executive order restricting American investors from buying shares or related securities of any companies given this designation by the U.S. Department of Defense (DOD).
https://www.cnbc.com/2021/05/12/xiaomi-shares-rally-after-us-agrees-to-remove-it-from-blacklist.html
Thanks - it looks like Vanguard added about 500,000 shares - they're
up to ~ 3.3 million.
This was before today's filing:
https://www.nasdaq.com/market-activity/stocks/idcc/institutional-holdings
xdx, yes I agree. But this article also says that there was
a "net balancing payment" payment to Nokia.
<<The terms of the technology-sharing agreement remain confidential, but Lenovo will make a net balancing payment to Nokia, the Finnish company said.>>
https://www.barrons.com/articles/its-a-great-time-to-own-financial-stocks-heres-why-51617276600
I'm referring to Lenovo. I'm just thinking that when a company
starts to settle with one company (like Lenovo settling with
Nokia), the trend usually continues for other companies. Of
course that's not a guarantee, but I've seen that happen before
over the years.
Don't forget the Lenovo lawsuit:
https://news.bloomberglaw.com/antitrust/lenovo-advances-antitrust-attack-on-interdigital-3g-4g-patents
Why hasn't anyone commented on Lenovo's settlement with Nokia?
In my view, today's move was more than IDCC being taken out of
one index and added to another.
APRIL 7, 20211:22 AMUPDATED 15 HOURS AGO
Nokia settles patent fight with Lenovo
By Reuters Staff
2 MIN READ
STOCKHOLM (Reuters) - Finland’s Nokia has settled a multi-year patent fight with China’s Lenovo Group, the world’s biggest PC maker, resolving all pending litigation across all jurisdictions, the companies said on Wednesday.
https://www.reuters.com/article/us-nokia-patent-lenovo-idUSKBN2BU0F7
<<The company generated $121.1 million of free cash flow2 in full year 2020>>
Thanks for the info.
So currently on a trailing basis, IDCC's price to free cash flow is
16.5X. So it's not an expensive stock.
And if Merritt can get that extra $300 million or so in revenue
growth, I can see why B Reilly has a high price target. And
if IDCC 'only' gets about 2/3 of that (to be conservative), that's
still good room for growth.
The reason why I'm invested in IDCC is that they generate lots
of cash for their size and they have room for growth.
<<We continue to believe that between just mobile and consumer electronics, in the long term, we can deliver roughly $300 million of additional recurring revenue on top of our 2021 rate.>>
https://seekingalpha.com/article/4407170-interdigital-inc-idcc-ceo-bill-merritt-on-q4-2020-results-earnings-call-transcript
<<On revenue generation, we deliver our best revenue year since 2017 signed 60 deals including the renewal of Huawei. We also renewed the number of deals down the field positioning us in 2021 with negotiations that are significantly mature and are position to close.>>
https://seekingalpha.com/article/4407170-interdigital-inc-idcc-ceo-bill-merritt-on-q4-2020-results-earnings-call-transcript
Oh yes, I guess that it's just so boring to rake in so much cash.
The Horror, The Horror!
I guess it's just boring watching it pile up, isn't it??
<<The company recorded $163.5 million of cash provided by operating activities, compared to $89.4 million provided by operating activities for full year 2019. The company generated $121.1 million of free cash flow2 in full year 2020, compared to $51.4 million for full year 2019. In each period, free cash flow was largely driven by cash receipts from patent license agreements, a portion of which relates to future periods.>>
<<Ending cash and short-term investments totaled $926.6 million.>>
https://ir.interdigital.com/news-events/press-releases/news-details/2021/InterDigital-Reports-Fourth-Quarter-and-Full-Year-2020-Financial-Results/default.aspx
Offical Press Release:
InterDigital Update Guidance for Fourth Quarter 2020
Company Release - 1/28/2021
WILMINGTON, Del., Jan. 28, 2021 (GLOBE NEWSWIRE) -- InterDigital, Inc. (NASDAQ:IDCC), a mobile and video technology research and development company, today provided revenue guidance for fourth quarter 2020.
The company expects total fourth quarter 2020 revenue to be between $87 million and $90 million, which includes between $85 million and $88 million of recurring revenue.
The company also expects that in the fourth quarter 2020 it will recognize one-time charges of approximately $10-11 million, primarily related to on-going patent portfolio management. The one-time charges are expected to bring the sequential increase in operating expenses to approximately $15 million. The company had previously stated an expected increase of $5 million operating expenses over third quarter levels, primarily driven by litigation activities.
https://ir.interdigital.com/news-events/press-releases/news-details/2021/InterDigital-Update-Guidance-for-Fourth-Quarter-2020/default.aspx
SeekingAlpha - InterDigital: Licensing Patents To Apple, Google, & Samsung
Nov. 30, 2020 1:44 PM ET | About: InterDigital, Inc. (IDCC)
https://seekingalpha.com/article/4392100-interdigital-licensing-patents-to-apple-google-samsung?utm_medium=email&utm_source=seeking_alpha&mail_subject=idcc-interdigital-licensing-patents-to-apple-google-samsung&utm_campaign=rta-stock-article&utm_content=link-0
Has anyone been paying attention to the '218 litigation?
The denial of the reexamination requested by Mylan was a big deal:
https://www.1600ptab.com/wp-content/uploads/sites/27/2018/12/IPR2018-01143-DDI.pdf
Also, if you read further down the page below this intro, about
half (or more) of the cases have settled.
The reason why I find this important is because the '218 patent
covers Xarelto's dosing techniques until 2034. Bears on Bayer
say the Xarelto money will dry up after 2024, but this looks
like Xarelto protection should be extended for 10 more years.
Also, as a recent buyer of the stock, I am expecting the Monsanto
litigation to completely settle for $12 billion - that's looking
better than before.
Here's the '218 litigation:
<<Beginning in April 2017, JPI and Bayer Intellectual Property GmbH and Bayer AG (collectively, Bayer AG) filed patent infringement lawsuits in the United States District Court for the District of Delaware against a number of generic companies who filed ANDAs seeking approval to market generic versions of XARELTO® before expiration of Bayer AG’s United States Patent No. 9,539,218 (’218) relating to XARELTO®. JPI is the exclusive sublicensee of the asserted patent.
The following generic companies are named defendants: Alembic Pharmaceuticals Limited, Alembic Global Holding SA and Alembic Pharmaceuticals, Inc. (Alembic); Aurobindo; Breckenridge; InvaGen; Lupin Limited and Lupin Pharmaceuticals, Inc. (collectively, Lupin); Micro; Mylan; Sigmapharm; Taro Pharmaceutical Industries Ltd. and Taro Pharmaceuticals U.S.A., Inc. (collectively, Taro) and Torrent. Lupin counterclaimed for declaratory judgment of noninfringement and invalidity of United States Patent No. 9,415,053, but Lupin dismissed its counterclaims after it was provided a covenant not to sue on that
patent. Aurobindo, Taro, Torrent, Micro, Breckenridge, InvaGen, Sigmapharm, Lupin and Alembic have agreed to have their cases stayed and to be bound by the
outcome of any final judgment rendered against any of the other defendants. The ’218 cases have been consolidated for discovery and trial. The trial began in April
2019 and closing arguments were heard in June 2019.>>
<<In October 2019, JPI and Bayer entered into a settlement agreement with Mylan. In November 2019, JPI and Bayer entered into a settlement agreement with
Breckenridge. In December 2019, JPI and Bayer entered into settlement agreements with each of Accord, Micro, Sigmapharm, Sunshine, and Torrent. In January
2020, JPI and Bayer entered into a settlement agreement with Macleods.
The consolidated ’218 cases involving Alembic, Aurobindo, InvaGen, Lupin, Taro, and Teva, and have been stayed until March 2020.>>'
Page 92 at the bottom:
https://johnsonandjohnson.gcs-web.com/sec-filings/sec-filing/10-k/0000200406-20-000010
Down almost 20% - what the heck is going on?
Did the Naldogen Pty deal fall through??
Or was it the big deal in the country ColUmbia???
Or was the deal with Columbia South Carolina????
I'm so confused - their spelling is mind boggling!
Or maybe it's their self-professed 'business model' that's
confusing?????
Where is the beef?????? Where is the money????????
Ending cash and short-term investments as of September 30, 2020 totaled $919.4 million.
https://ir.interdigital.com/news-events/press-releases/news-details/2020/InterDigital-Announces-Financial-Results-For-Third-Quarter-2020/default.aspx
InterDigital Q3 Investor Presentation.
This 8-K was filed this morning in conjunction with the Sidoti
conference. But I haven't listened to the conference yet:
http://d18rn0p25nwr6d.cloudfront.net/CIK-0001405495/a912080e-597e-4d7c-b7f7-6dee2374be9d.html
I think that this from Seeking Alpha is wrong:
<<Current Market capitalization of IDCC is $1.8 billion. It has net cash of around $200 million (net of all long-term liabilities),>>
IDCC's net cash position is $426 million if you subtract the long-term
debt of $355 million from the cash and marketable securities of $781
million.
Of course there's a long-term liability of deferred revenue of $104
million on page 4 below. But I don't see why that should detract
from net cash because I think that's offset by revenue over time:
http://d18rn0p25nwr6d.cloudfront.net/CIK-0001405495/6e28e00e-8e79-4f6b-91c0-b83cdcde0d9a.pdf
<<What new plant?
Like the one in Vietnam?>>
Magmar, maybe it's with Naldogen Pty? That allegedly
great "company" in South Africa that's going to make
ALLM people rich, rich, rich!
Where's Naldogen?
Where's the beef in general??
What a sad joke!!
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=115165191
In the last three quarters...
• Six new licenses
• ZTE
• Google
• Funai
• Huawei
• Fairphone
• Humax
Slide 9:
https://www.snl.com/Cache/IRCache/eaf81fbc-d3b5-3279-e027-7991a7ba556c.PDF?O=PDF&T=&Y=&D=&FID=eaf81fbc-d3b5-3279-e027-7991a7ba556c&iid=4103938
Even though IDCC's share price is 14X Nokia's, Nokia is actually
worth about 14X IDCC.
NOK's market cap is 24.5 billion and IDCC's is 1.77 billion.
<<That's why Bryer's makes peach and strawberry.>>
Excellent point - that's why I like to have nice reliable
dividends with stocks that also appreciate so I can buy both
and I don't have to choose on that particular shopping day!
PS:
I prefer Hagan Dazs.
IDCC does pay a dividend in case you forgot = 2.52% or $1.40 a year.
And IDCC can continue to pay that dividend due to new licenses
that were signed. In fact, they can likely increase their
dividend because of that - the can hopefully keep turn their
five year dividend increase into its sixth year.
So, if you wanna nitpick, I can go back to when I signed up
for this board 11 years ago when IDCC was $20. Assuming
statically that I just bought and held then, my CAGR is 10.5%
with NO taxes paid except on the dividend.
Add in that and chock on another 2% or so for about a 12%
CAGR.
In my view, that's pretty good and there's more to come.
Good question - I did make about $20 K selling a
$100 call back then - I'm glad that I did that.
I'm also glad that my break-even is in the low 30's.
One big mistake that many investors make (due to CNBC
and many other reasons) is that they think in quarterly
or annual increments.
In my view, they should look in two, three or five year
chunks.
<<compared to what - 3 years ago ??>>
IDCC got ahead of itself then.
I have more shares now - added in the 40's.
<<lte.....at one point in 2001...fully diluted sharecount was in excess of 60myn.>>
TONYCEE, thanks for checking - I didn't have time to check every
single year - I just did a sample analysis.
So they have indeed cut their share count in half - it's taken
quite a while, but that's still very commendable.
SO many companies dilute their share count by a little each year
and people don't think it's such a big deal because it's 'only'
a couple or a few percent or so.
But over time, that can be very dilutive - I am glad that IDCC
is the exact opposite of that!
Any happier today about IDCC?
I am!
IDCC has been decreasing their share count for 17 years now - go
back and check the annual reports - I did. They were going up
from the late 90's and they basically peaked at 55 million in
2003 and have been going down almost annually:
http://ir.interdigital.com/FinancialDocs
Now look at the stock chart over those years:
In 2003 it was $13:
https://tinyurl.com/y72qhs79
The trend is your friend!
<<I'll repeat, 30 or 40 mil would not have made a difference to their survival in any situation, unless you think like Chuck Schumer.>>
You're right it wouldn't have made a difference for InterDigital
either on the grand scheme of things after retiring about
50% of their shares in the last decade or so.
Where's the beef??
<<There was no good reason
not to be buying in Feb and March, at least. With 800 mil in the bank spending 30 - 40 mil to reduce as much as 5% of the shs/outstanding,>>
No good reason?
Back in early March many were saying this would be the Spanish Flu
all over again where about 0.6% of the US population died = 600,000
or so back in 1918.
Today, that would take US deaths up to 2 million people - a catastrophic
number. And what if it was worse? The economy cold basically
shut down for a lot longer than 'just' a couple of months.
I think that companies that are survivors are conservative with
cash when the future is so uncertain - just look at Buffett.
And luckily we 'only' (not to put it lightly) have 75,000 deaths in
the USA right now. Let's hope that it won't go incredibly higher.
PS:
Hindsight is 20/20.
Yes, I see what you're saying.
I guess that the only times they can't buy are when new licenses
are imminent (not a couple of months away) and when they're in
a quiet period before earnings. I forget the exact rules about
the quiet period. I agree with Buffett, I'd rather be roughly
right than precisely wrong.
On to something else.
Good point.
Let's not forget IDCC's royalty rate sheet - 0.6% on 5G with a
floor of $60 and a cap of $200:
https://www.interdigital.com/rate-disclosure
If most of the Chinese phones that are sold in China are sold
at the low end, that's a big difference.
Merritt told us today that there's still 1/3 of the market
that are licensing holdouts - Oppo, Vivo, Lenovo, TCL and
one or two more decent size ones.
The good thing is that he told us that a lot of their sales
are outside of China. I remember reading that why Qualcomm
is helpful for Oppo and Vivo (and I guess some others) is
because they make it easier for them to buy turnkey chipset
solutions inside of China and sell them globally
<<And/or they weren't able to buy during a period where they were negotiating and making substantial progress on the Huawei license.>>
Good point.