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sjratty: Agree. It is my understanding that a preliminary injunction is very difficult (almost impossible) to obtain in a patent infringement case.
rmarchma: If you want to see how IDCC handled restricted stock, in the annual report go to Statement of Shareholder's Equity and look at the Unearned Compensation column. Also from the Notes:
Restricted Stock
In 1999, we adopted the 1999 Restricted Stock Plan, amended April 13, 2000 under which we can issue up to 3,500,000 shares of restricted common stock and restricted stock units to directors, employees, consultants and advisors. The restrictions on issued shares lapse over periods generally ranging from 1 to 5 years from the date of the grant. As of December 31, 2002 and 2001, we had 915,064 and 812,658 shares of restricted stock and restricted stock units, respectively, issued under the plan. The balance of unearned compensation at December 31, 2002 was $0.8 million, which will be amortized over vesting periods that are generally from one to three years.
zitboy: Must be a mistake
From CME as of 5:40 PM 2/2904
EUROFX MAR04 1.2499 +10
http://www.cme.com/dta/del/globex.html
rmarchma: in regard to restricted stock, from everything I have read it seems that the charge to earnings is equal to the fair market value of the stock at the grant date, amortized over the vesting period.
wilco24: This is all that has been stated on what the arbitration is about. As stated, if the arbitration panel agrees 100% with Nokia, the answer to your question would be yes. However, even if they agree about the trigger, I believe the arbitration panel could still come up with their own formula for payment.
"Nokia’s arbitration request relates to our claim that the patent license agreements we signed with Ericsson and Sony Ericsson in March 2003 defined the financial terms under which Nokia would be required to pay royalties on its worldwide sale of 2G and 2.5G products commencing January 1, 2002. Nokia is seeking a determination that their obligation under our existing patent license agreement is not defined by our license agreements with Ericsson and Sony Ericsson or has been discharged. Alternatively, Nokia is seeking an order requiring access to various documents related to previous litigations, negotiations, and arbitrations with other parties. During third quarter 2003, ITC filed an Answer to Nokia’s Request for Arbitration arguing that the patent license agreements we signed with Ericsson and Sony Ericsson in March 2003 defined the financial terms under which Nokia would be required to pay royalties on its worldwide sale of 2G and 2.5G TDMA-based products commencing January 1, 2002, that Nokia’s duty to pay these royalties has not been discharged, and that the documents sought by Nokia are not relevant to the royalty determination. ITC also counterclaimed for an order requiring that Nokia pay us royalties on equivalent terms and conditions as those set forth in the Ericsson and Sony Ericsson patent license agreements for the period January 1, 2002 to December 31, 2006, and determining the amount of the royalty and payment terms. During fourth quarter 2003, Nokia filed a Reply contesting our claims and including additional claims and defenses relating to the enforceability, validity, and infringement of certain of ITC’s patents. Nokia is also seeking to prevent the commencement of arbitration proceedings that would determine royalty amounts owed to us for the period starting January 1, 2002 pending access to its requested documents. We do not believe that the issues of patent enforceability, validity, and infringement are relevant to the royalty dispute and intend to vigorously contest Nokia’s position."
broken80: Employee development is usually education and training to broaden employee knowledge, skills, and abilities. Can cover courses, workshops, seminars, or conferences to develop individual capabilities
Corp_Buyer: Regarding the estimated 4th qtr expense increase, the following from the 3rd quarter 10Q
"We currently anticipate that fourth quarter 2003 operating expenses could increase 5% to 10% over third quarter 2003 levels. Contributing to the increase will be higher directors’ and officers’ liability insurance premiums. Additionally, as we continue to grow our business, we expect to increase our investment in marketing, patent licensing and employee development activities."
Texastennis: I guess it is a nice service, but why should anyone pay to see those license agreements when they are available in SEC filings by IDCC.
brokentrade: I would say ETF data is not included in the Nasdaq reported short interest data. For info on the reported data see:
http://www.nasdaqtrader.com/trader/defincludes/nasdshortint_def.stm
OT: Brokentrade: In regard to your PM, I would say the short interest figure is company specific. The QQQ has its own short interest report.
http://www.nasdaq.com/asp/quotes_full.asp?mode=&kind=shortint&symbol=IDCC&symbol=QQQ&....
Nieves: What news?
Jim: Recently there have been references to a “quiet period” and a “black-out period” around earnings release time. According to the SEC, they have no restrictions or rules covering these subjects. The only “quiet period” the SEC has relates to a stock registration, while “black-out periods” are individual company imposed
SEC > SEC Rules & Laws > Question 3 of 204
Question: Before a company releases earnings, it seems there is a certain period of silence. How long is this "quiet period"?
Your Answer: Answer last updated: 02-11-02
The term "quiet period" -- also referred to as the "waiting period" -- is not actually defined under the federal securities laws. It generally refers to the period that begins when a company files a registration statement with the SEC and lasts until the SEC's staff have declared the registration statement "effective." During this period, the federal securities laws limit what information a company and related parties can release to the public.
There is no such thing as a "quiet period" or period of silence before a company announces its quarterly or year-end financial results.
You can learn more about the quiet period -- including the rules that outline the limitations on a company's statements during the quiet period -- by reading our "Fast Answer" on that topic.
To the extent that you are interested in selective disclosure to analysts prior to an earnings announcement, please read our "Fast Answers" on Selective Disclosure and Fair Disclosure, Regulation FD.
SEC > Companies > Question 24 of 150
Question: Is there a standard "black-out period" before earnings reports when insiders cannot trade stock? How do I find out whether a company has such a period and whether it applies to a beneficial owner who is not an employee?
Your Answer: Answer last updated: 02-06-03
The SEC does not impose any restrictive or "black-out" period. Instead, individual companies can decide to impose such restrictions. You will have to contact the company directly to request information about any restrictive trading period it may have for its employees. It is up to the company whether or not it will seek to have beneficial owners subject to any restrictive period.
TFWG: I think IDCC should hire Anne Morris for their PR staff.
Mschere: I think you are doing fine. As a non tech person myself, I wish I had as much understanding of the technical issues involved as you seem to exhibit.
Short interest down:
............... Short .......Avg Daily......Days
Date.... Interest....... Volume.......to Cover
Feb. 13, .... 3,517,128... 707,525....... 4.97
Jan. 15, .... 3,963,614... 693,674....... 5.71
Data-Rox: Thanks for the reply.
Data-Rox: Does this relate in some way to the Infineon-Zyray announcement, or is it a different animal? The announcement is only a little over 3 months old.
Nuremberg/Germany, November 4th, 2003. Comneon, one of the world's leading providers of protocol stacks and wireless applications for GSM, GPRS, EDGE and UMTS/WCDMA solutions, today announced that its UMTS/WCDMA multi-mode protocol stack has reached another significant milestone in the wireless evolution towards 3G mobile devices after successful interoperability testing (IOT) with another major infrastructure vendor.
By successfully achieving 3G IOT for AMR speech calls (MO and MT), 384 kbit/s packet switched data transfer and support for 3G QoS and USIM, Comneon has taken another step to enable the smooth evolutionary progress between 3G and existing 2G technologies. Key to this success is the Comneon UMTS/WCDMA multi-mode protocol stack, developed in conjunction with InterDigital Communications Corporation. The interoperability tests were performed using Infineon Technologies' FP1-UE complete dual mode form factor handset reference design, powered by Infineon's WCDMA/EDGE/GPRS chipset and Zyray Wireless' SPINNERTM WCDMA baseband processor.
L2v: As you say, acronyms can get confusing. The acronym associated with the 3G platform group involved with royalties is 3G3P. The following, from that group"s web site, is a listing of the companies involved . As noted in my prior comments about the European Union's approval, Nokia, Ericcson, Motorola, and Qualcomm, (also IDCC), are not listed.
Companies associated with the 3G Patent Platform Partnership (3G3P) during the period September 1999 to December 2002
Partners-Manufacturers:
Alcatel
Bosch
ETRI (Research Institute)
Fujitsu
LG Electronics
NEC
Matsushita
Mitsubishi Electric
Siemens
Samsung
Sony
Partners-Operators:
Cegetel
France Telecom
KPN
Korea Telecom
NTT DoCoMo
Telecom Italia Mobile
SK Telecom
Sonera
Promoters-Manufacturers:
Huawei Technologies
Kyocera
Sharp
Telit Mobile Terminals
Promoters-Associates:
GSM Association
ETNO (European Operators)
http://www.3gpatents.com/history/history.htm#top
mschere: How does this fit into the mix?
London, January 9, 2003. -- 3G Patents today announced the start of commercial 3G Patent Platform services for evaluating, certifying, and licensing, patents that are technologically essential for the manufacture and operation of third generation (3G) mobile communication systems. 3G Patents is now accepting applications to undertake essentiality evaluations of patents that may be technologically essential.
http://www.3gpatents.com/news/2003002.htm
Data_Rox: Did some quick research in regard to the 3G Patent Platform. Some of the interesting items I noted were
This was the press release announcing the platform in 1999. IDCC was listed as one of the original participating members of the group
Industry group plans a 5% maximum royalty for 3G Systems
Paris, 30 June 1999 - The world’s leading wireless companies have completed the definition of a 3G Patent Platform for handling the IPR concerns first highlighted by the standardization bodies. The 3G Patent Platform provides a voluntary low cost but fair arrangement for evaluating, certifying and licensing Essential Patents for third generation mobile communication systems (3G Systems). The introduction of this arrangement will contribute towards both the commercial viability of 3G Systems and to catalyze market growth.
The 3G Patent Platform has been defined within the framework of the UMTS IPR Working Group during the period February 1998 - June 1999. The 3G Patent Platform was presented to the UMTS IP Association today during the General Assembly and its specification, available from the Secretary, will be distributed among 3G manufacturers and operators for consideration during the period July-August 1999.
The 3G Patent Platform could be applicable to all the technologies currently under definition within the ITU IMT 2000 framework.
When the Maximum Cumulative Royalty (MCR) covering the 3G Essential Patents per product category (i.e. terminals, infrastructure, test equipment and others) will go into effect, it will be set at 5% of the ex-works sales in order to contain the total amount of royalties paid by any one licensee. The royalties collection point has been set to the last manufacturer in the manufacturing value added chain so that licenses will cover all formerly involved activities that resulted in the product, including chip and sub-assembly.
The Standard Royalty Rate (SRR) for each 3G Essential Patent licensed in each product category is set initially at 0.1% of the ex-works sales. The SRR will be adjusted periodically in accordance with a defined procedure ensuring that the MCR is respected. Granted licenses will be global.
"3G is no longer a pipe-dream now that the major technological choices have been made within the framework of ITU IMT-2000. All that remains is to put in place a low cost but fair IPR regime. The 3G Patent Platform is a real response to this need," said Brian N. Kearsey President, UIPA.
The 3G Patent Platform, which is intended to become operational on or about March 1, 2000, will operate within a to be established service company lead by a Director General. The preparatory work necessary for operational implementation of the 3G Patent Platform will take place within a legally constituted Partnership under English law. The Partnership will come into being during September 1999 under the leadership of the Director General (Designate). The Partnership will be open, as from September 1, 1999, to all interested companies sharing the desire to launch the 3G Patent Platform.
During the period September 1999 - February 2000 the Partnership will, among other tasks, select and establish a third party Licensing Administration and Patent Evaluation organization through a competitive tender process. It will interface with the anti trust authorities in US, Europe and Japan, establish co-operative arrangements with the international and regional standards bodies e.g. ITU, ETSI, ARIB, TIA, T1 Committee, TTC, 3GPP and 3GPP2 and liaise with the various operator organizations e.g. GSM Association, ETNO, OHG.
"The Pundits claimed it was "mission impossible"; all we have done is to prove them wrong. The introduction of the 3G Patent Platform, operating within a service company serving the global industry, will no doubt contribute towards the commercial success of 3G Systems," said John MacNaughton Chairman of General Assembly, UIPA.
The following companies and organizations have participated in some or all of the activities of the UMTS IPR Working Group since its inception in February 1998:
AirTouch, Alcatel, Analog Devices, Bosch, British Telecom, China Academy of Telecommunications Technology, Cegetel, Conexant Systems, CSEM/Pro Telecom, Ericsson, France Telecom, Fujitsu, Golden Bridge Technology, InterDigital, LG Telecom, Lucent Technologies, Mannesmann, Matsushita, Mitsubishi Electric, Motorola, NEC, Nokia, Nortel, NTT DoCoMo, OKI electric, Philips, Qualcomm, Sagem, Siemens, SIPRO Lab Telecom, Sirius Communications, Sonera, Sony, T-Mobil, Telital, Telecom Italia Mobile, Texas Instruments, VIAG Interkom and Wavecom. Representatives from ETNO, ETSI and the GSM Association also participated.
http://www.3gpatents.com/news/99109d.htm
Although Ericcson, Nokia, Motorola and Qualcomm, participated in the discussions, they apparently have opted out from from the arrangement. The following is from the November 2002, U.S. Department of Justice (DOJ) and the European Commission (EC) approval of the agreements among a group of telecommunications manufacturers that will permit those companies to share patented technical information for third-generation (3-G) mobile phones.
"Finally, the Commission has also taken into account that a number of major 3G essential patent holders (among those Ericsson, Nokia, Motorola, and Qualcomm) are not party to the notified arrangements. Given the significant number of essential patents that will remain outside of the arrangement, the Commission has concluded that it appears unlikely that the notified agreements will be capable of restricting the competitive offer of 3G mobile technologies and 3G services to consumers."
http://www.useu.be/Categories/Telecommunications/Nov1202TelecomPatentsCleared.html
For overall info on the 3rd Generation Partnership Project (3GPP)
http://www.3gpp.org/
rmarchma. A very thoughtful analysis, Your worst case scenerio is generally close to the recorded analyst estimates. If some of your uncertainties come thru, it would then be considered a very good quarter.
rmarchma: In addition to what is required to be reported, The 8k form has an item 5 under which a company, at its option may report information not otherwise required by the form, that is deemed of importance to security holders.
So, until the SEC comes up with their proposed changes, I guess it is up to the company to decide what is material.
Corp-Buyer: Since Ron is a CPA and more familiar with IDCC's accounting, more appropriate for him to respond.
rmarchma: Some more info regarding 8K reporting and materiality.
Based on the current 8k reporting requirements there does not appear to be a requirement in regard to materiality
Form 8-K currently consists of nine disclosure items. Six of the items describe specific events that require companies to file Form 8-K. Those events are:
* A change in control of the company;
* The company's acquisition or disposition of a significant amount of assets;
* The company's bankruptcy or receivership;
* A change in the company's certifying accountant;
* The resignation of a company director;
* A change in the company's fiscal year.
However, in 2002 the SEC proposed new rules, including some that specifically addresses materiality. The new rules apparently are still under study
The following is a list of the new disclosure items that we propose to add to Form 8-K:
* Entry into a material agreement not made in the ordinary course of business;
* Termination of a material agreement not made in the ordinary course of business;
* Termination or reduction of a business relationship with a customer that constitutes a specified amount of the company's revenues;
* Creation of a direct or contingent financial obligation that is material to the company;
* Events triggering a direct or contingent financial obligation that is material to the company, including any default or acceleration of an obligation;
* Exit activities including material write-offs and restructuring charges;
* Any material impairment;
* A change in a rating agency decision, issuance of a credit watch or change in a company outlook;
* Movement of the company's securities from one exchange or quotation system to another, delisting of the company's securities from an exchange or quotation system, or a notice that a company does not comply with a listing standard;
* Conclusion or notice that security holders no longer should rely on the company's previously issued financial statements or a related audit report; and
* Any material limitation, restriction or prohibition, including the beginning and end of lock-out periods, regarding the company's employee benefit, retirement and stock ownership plans.
We also propose to move the following two items from other Exchange Act reports to Form 8-K:
* Unregistered sales of equity securities by the company;
* Material modifications to rights of holders of the company's securities.
http://edgar.sec.gov/rules/proposed/33-8106.htm
rmarchma: SEC rule on materiality in regard to financial statements. To long to post.
I also appreciate your postings of your discussions with Janet.
http://www.sec.gov/interps/account/sab99.htm
Gamco/plumear: Heartland Wireless (HARTQ.PK) is not a Heartland fund. The symbol refers to a small Texas cable TV company that is in bankruptcy ( 5th letter "Q" in symbol). Note the quoted price $0.0035
Heartland Wireless Communications, Inc.
200 CHISHOLM PLACE
SUITE 200
PLANO, TX 75075 +1 972 4239494
Heartland Wireless Communications, Inc. develops, owns and operates wireless cable television system in 57 markets in the central United States. The company offers its subscribers local off-air VHF/UHF channels, as well as HBO, showtime, disney, ESPN, CNN, USA, WGN, WTBS, Discovery, the Nashville network, A&E and other cable networks. During 1997, the company acquired two operating wireless cable television systems in Woodward and Watonga, Oklahoma and consummated an exchange with American Telecasting Inc., of wireless cable channel rights and related assets in South Dakota and Florida.
sloane6: By using a "paper' submission we are unable to review their financial statements on the internet, so we cannot determine whether they have set aside a reserve to cover their potential liability to IDCC.
TFWG: The SEC Public Reference Room is in Washington:
"if you want to retrieve a paper filing, please contact the SEC Public Reference Room and be sure to provide the "Paper/Film #" that appears in blue under the company's name."
For info on Public Reference Room:
http://www.sec.gov/info/edgar/prrrules.htm
sloane6: Unlike Nokia, Samsung has been filing "paper" reports to the SEC. These are not available for on line viewing, but must be physically examined.
Ghors: Wouldn't the "Patent Act" be the applicable statute?
35 USC 286, Time limitation on damages
This document contains one section of the U.S. Patent Act (found in Title 35 of the United States Code). This page was last updated in March 2000. All of the sections of the Patent Act are listed on the Index page. A word index is also available.
§286. Time limitation on damages
Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action.
In the case of claims against the United States Government for use of a patented invention, the period before bringing suit, up to six years, between the date of receipt of a written claim for compensation by the department or agency of the Government having authority to settle such claim, and the date of mailing by the Government of a notice to the claimant that his claim has been denied shall not be counted as part of the period referred to in the preceding paragraph.
http://www.bitlaw.com/source/35usc/index.html#CHAPTER%2028%20-%20INFRINGEMENT%20OF%20PATENTS
Sorry for the confusion: Found the new website for the article:
http://www.converium.com/2103.asp
© 2001 Converium
Legal Information Doctrine of Laches and Patent Infringement Litigation
Peter Szendro, peter.szendro@converium.com, phone: +1 212 898 5185
Patent infringement litigation has risen steadily in the U.S. during the past decade. The increasing number of infringement suits reflect the value of intellectual property to business and the need to enforce associated rights in an increasingly competitive marketplace. Patent holders can aggressively enforce their rights against known infringers but what if the patentee is unaware of the infringing conduct? Are patent holders under a duty to actively police the marketplace, locate potential infringers and commence litigation to protect their intellectual property? If so, what is the applicable standard that this duty must satisfy and what is the timeframe within which such enforcement actions must be brought? Do equal standards apply to cases of infringement practiced openly as opposed to conduct ascertainable only through constant vigilance and investigation of competitors' products? These questions are crucial to patentees' efforts to capitalize on inventions as well as to the insurability of patent infringement. Successful underwriting and claims management of patent infringement risks and litigation demands an understanding of the rules governing patentees' obligations regarding enforcement of their rights and the timeframe within which that must take place.
The doctrine of laches
Asserting the defense
The presumption
Non-presumptive laches
Current trends
The lessons of Wanlass
The doctrine of laches
Laches is recognized as an equitable defense available to defendants in patent infringement litigation under 35 U.S.C. Section 282 (1988). Laches enables the infringer to avoid liability if the patent holder delays too long before commencing litigation. The doctrine flows from the longstanding, fundamental legal principle that equity will not protect those who sleep on their rights. /1/
The laches doctrine assures that old grievances will some day be laid to rest, that litigation will be decided on the basis of evidence that remains reasonably accessible and that those against whom claims are presented will not be unduly prejudiced by delay in asserting them. Inevitably, it means that some potentially meritorious demands will not be entertained. But there is justice too in an end to conflict and in the quiet of peace. /2/
The U.S. Supreme Court has long held the laches defense applicable to patent infringement cases. /3/ The defense contains two elements:
* The patent holder delayed bringing suit and that delay was unreasonable and inexcusable; and
* The alleged infringer suffered materially prejudicial harm from the delay. /4/
The material harm under the second element of the defense may be economic or evidentiary in nature.
Thus, an infringer may claim that plaintiff's delay in bringing suit caused the infringer to believe that plaintiff would not object to defendant's infringing conduct. Based on this belief, defendant continued the infringing activity, thereby substantially increasing potentially recoverable damages. This would constitute material prejudice in the form of economic harm. Regarding evidentiary harm, the accused infringer may be prejudiced by loss of evidence, unavailability of witnesses or diminished recollection on the part of those involved, due to the lengthy delay between the date patentee learned of the infringing conduct and when suit is filed.
To the extent the defense bars suits or limits recovery of damages, its effect is similar to but less severe than that of a statute of limitations. Laches differs from a statute of limitations in that it fails to constitute a complete defense against patent holders' lawsuits. Patentees against whom the laches defense has been successfully invoked are barred from collecting only those damages that accrued prior to filing suit. /5/ Patentees may recover damages flowing from infringing conduct that takes place after commencement of an infringement action, even where the accused infringer successfully invokes the laches defense. Accordingly, interposition of laches does not permit the alleged infringer to lawfully continue the infringing conduct. Continued infringement remains the subject of litigation that may require settlement, entering into licensing agreements that require the payment of royalties to the patentee or paying the burdensome cost of patent infringement litigation while facing an uncertain outcome. As a practical matter, infringing activity often diminishes substantially or ceases entirely after suit is commenced.
Asserting the defense
The burden of establishing the elements of delay and prejudice fall on the accused infringer. In order to successfully assert the defense of laches, the accused infringer must prove both prongs of the defense in response to a complaint alleging infringement, filed by a patentee. The infringer must prove those elements by a preponderance of the evidence standard. /6/
Laches is interposed as an affirmative defense in response to a complaint alleging infringement filed by a patentee. The accused infringer bears the burden of production of evidence as well as the burden of persuasion throughout the litigation process. The latter refers to the need for defendant to produce evidence of sufficient quantity and quality to persuade a judge or jury. Therefore, to prevail in a defense of laches, infringing defendant must show by a preponderance of the evidence, the two elements discussed above. However, where the facts give rise to a presumption of laches, discussed below, the infringer may prevail merely by showing the passage of the period of time required to trigger the presumption.
The presumption
Courts have generally considered six years as the applicable time frame for a presumption of laches to arise. /7/ Where the patent holder knew or should have known of the infringing activities of defendant for more than six years, a presumption of laches arises that is subject to both rebuttal and evidentiary proof. This judicially manufactured rule springs from statutory roots. Regarding patent infringement actions, 35 U.S.C. Section 286 permits recovery of damages only for infringement that takes place during the six-year period preceding the commencement of the lawsuit. Both Section 286 and the laches doctrine condition the right of patent holders to sue for infringement without fully barring that right or the right to recover damages. Where established, the presumption permits defendant to prevail based upon proof that the patent holder knew or should have known that infringing activity was taking place six years or more prior to filing suit. Under the presumption, defendant need not prove the elements of unreasonable delay and substantial prejudice. Patentee may rebut the presumption by presenting evidence that, if believed, would disprove either element of laches. If the presumption is defeated, defendant infringer may still prevail on a laches defense by proving the elements of delay and prejudice. Where patentee is unable to defeat the prejudice, he may still prevail in the lawsuit by showing that he did not have actual or constructive notice of infringement, or if he did, he gained that knowledge less than six years prior to filing suit. The patentee needs merely to show the existence of a genuine issue of fact regarding either prong of the defense to rebut the presumption. Where patentee is successful in doing so, the accused infringer must go forward, present evidence, and prevail on a "preponderance of the evidence" basis without the benefit of the presumption working in his favor.
Non-presumptive laches
Although a presumption of laches arises where the patentee brings suit more than six years after gaining actual or constructive knowledge of defendant's infringing activities, the defense of laches is not defined by any specific period of time. /8/ Any period of time may be found to amount to unreasonable delay, depending on the facts present, although shorter delays are less likely to trigger the defense. Courts usually take a totality of circumstances approach, taking into account all relevant factors when making a determination as to the viability of the defense. Factors considered upon judicial inquiry include how long defendant has engaged in allegedly infringing activities, whether the infringement was open and notorious or covert, whether patentee attempted to police its rights by surveying the marketplace and testing potentially infringing products, the ease with which testing could be accomplished and the financial burdens imposed by such testing. This is not an exhaustive list and courts will consider any and all factors relevant to the circumstances of a particular inquiry to determine whether patentee's delay in commencing suit resulted in evidentiary or economic harm to the accused infringer.
In making a determination regarding laches, courts recognize conditions under which the patent holder's delay may be excused. /9/ Judicially recognized excuses include the following:
* the existence of other litigation;
* negotiations with the accused infringer regarding the subject matter of the subsequent lawsuit in which the infringer seeks to assert laches;
* poverty or illness of the patent holder under limited circumstances;
* wartime conditions;
* extent of infringement (where infringing conduct may have amounted to minimal levels of economic activity or financial impact); and
* dispute regarding ownership of the patent in question. /10/
The patent holder may assert one or more of the listed excuses to defeat a presumption of laches. Further, a patent holder may defeat the laches presumption or defense on the grounds that the infringing defendant engaged in conduct so egregious that equity disallows a holding for defendant. Conscious copying constitutes such an example, although a good faith belief in the merits of a defense, or simple ignorance, does not. /11/ Accordingly, a delay in bringing suit by patentee against an infringer engaged in willful copying of the product in question may not be amenable to the successful interposition of a defense of laches by that infringer.
Current trends
In 1998, the United States Court of Appeals for the Federal Circuit handed down a pair of decisions regarding application of the laches defense. In Wanlass v. Fedders Corporation, /12/ plaintiff procured a patent on a single phase motor used in room air conditioners. After unsuccessful efforts to market it to major manufacturers, including Fedders, plaintiff abandoned his efforts and focused on development of more complicated designs. Fifteen years later, plaintiff learned that various companies may have been infringing his patent for a substantial period of time. He commenced suit against Fedders, which asserted the defense of laches. The appellate court held the presumption was properly found but that plaintiff successfully introduced "evidence sufficient to support a finding of the nonexistence of the presumed facts." /13/ The court held that Wanlass failed to gain actual or constructive knowledge of the infringement in question more than six years prior to filing suit and reversed the grant of summary judgment issued by the trial court. The factual findings that the infringing activity was not open, obvious or public were central to the appellate decision. The parties had no significant previous course of dealing that could have formed the basis for constructive notice. Wanlass was found to have been unaware of the infringement and would have had to continually test numerous air conditioner models to learn of it. The court found this to be overly burdensome in light of the cost and inherent technical and other difficulties. The opinion acknowledged a patentee's duty to police the market where suspicion of infringement existed, but refused to impose that duty under the facts present.
This holding stands in sharp contrast to one handed down ten days prior and involving the same plaintiff and the same patent, in Wanlass v. General Electric Company. /14/ Based on facts applicable to General Electric's (GE) alleged infringing conduct, the court in this case found the presumption properly invoked, found no genuine issue of material fact as to the elements presumed, and granted summary judgment for defendant GE. As in Fedders, plaintiff filed suit in 1995. The issue was whether Wanlass knew or should have known of GE's infringing activities prior to 1989. The General Electric court stated the standard of constructive knowledge as follows:
"The law is well settled that where the question of laches is in issue the plaintiff is chargeable with such knowledge as he might have obtained upon inquiring, provided the facts already known by him were such as to put upon a man of ordinary intelligence the duty of inquiry." /15/
GE manufactured, marketed, and sold air conditioners with motor designs similar or identical to plaintiff's patented design from 1977 to the time Wanlass filed suit in 1995. Plaintiff performed some testing between 1977 and 1982, but not again till 1992, the results of which gave rise to claims of infringement herein. The products needed for testing were readily available, they were inexpensive to obtain and testing required only two hours and required no special equipment and was not otherwise difficult. The court found GE's product sales were open and notorious. This gave rise to a continuing duty on the part of Wanlass to police the marketplace and investigate GE products beyond 1982. /16/ Accordingly, Wanlass should have known sometime prior to the critical date of 1989 that some of GE's products infringed.
GE was found to have suffered, at the minimum, evidentiary prejudice in the form of deceased and unavailable witnesses and diminished recollection on the part of available witnesses including Wanlass. Further, one allegedly infringing GE product type was no longer available. A similar, contemporary product offered by GE was found to be non-infringing but plaintiff disputed its functional equivalence to the earlier model. The court laid blame for such evidentiary problems directly on plaintiff's delay and therefore found laches applicable, the presumption valid and sustained the grant of summary judgment on the basis of the presumption by the trial court. /17/
The lessons of Wanlass
The U.S. Court of Appeals for the Federal Circuit arrived at opposing conclusions in the two Wanlass cases, despite the involvement of the same plaintiff and patent. The court focused on the open practice of infringement in the General Electric case and the lack of same in Fedders, to support its conclusions. Open and notorious activities, including "…sales, marketing, publication or public use of a product similar to or embodying technology similar to the patented invention, or published description of the defendant's potentially infringing activities, give rise to a duty to investigate whether there is infringement." /18/ Another focal point appeared to be past course of dealing between GE and Wanlass. In 1977, GE refused plaintiff's licensing offer on the grounds that the Wanlass patent was invalid and advised him that GE intended to continue use of the technology in its products. /19/ In the court's view, Wanlass was on notice of GE's potential infringement from this point forward. Accordingly, the holding in the case differs from that in Fedders based on the open use and sales of the product and other factors, including but not limited to past dealings between the parties, all of which would place a reasonable patent holder on notice of potentially infringing activities. This amounts to constructive notice and triggers a duty to investigate and the commencement of the six-year presumption period.
The two Wanlass holdings have been criticized by at least one commentator as having extended or even created a higher level of duty without defining its boundaries or offering guidance regarding its implementation. /20/ In this view, the inconsistency between the two holdings will create confusion for patentees and alleged infringers, and likely lead to improper application of the laches defense and unnecessary patent litigation in the future.
Underwriting strategies regarding patent infringement risks need to take into account application of laches in order to properly assess the risk presented. On the enforcement side, the underwriter must assess the adequacy of the potential policyholder's efforts at policing the marketplace with respect to patents for which he seeks enforcement. The application for insurance must ascertain with specificity the state of applicant's knowledge regarding possible infringers and their activity, as well as the date such knowledge was acquired. Less than diligent efforts may result in claims under the policy that could have otherwise been prevented, or excluded from coverage. Further, the litigation brought by the policyholder for which coverage may be sought under an enforcement policy is more likely to be barred by laches, preventing recovery for both policyholder and insurer. Coverage must be carefully tailored to exclude indemnification of the policyholder for unrecoverable damages due to application of the laches defense.
On the defense side, the application of laches may provide opportunities to write risks that otherwise appear to pose exposure. Similarly, when managing patent infringement claims, the application of the defense may lead to faster and more economical settlements, or may give rise to successful motions for summary judgment, thereby saving substantial defense costs in the process.
/1/ Lane & Bodley Co. v. Locke, 150 U.S. 193 (1893).
/2/ Environmental Defense Fund v. Alexandra, 614 F.2d 474 (5th cir.), cert. denied, 449 U.S. 919 (1980).
/3/ A.C. Auckerman Company v. R.L. Chaides Construction Co., 960 F.2d 1020 (Fed. Cir. 1992), citing Lane & Bodley Co. v. Locke, 150 U.S. 193 (1893).
/4/ Id. at 1032.
/5/ Id. at 1041.
/6/ Id. at 1025. See also Fed. R. Evid. 301.
/7/ Id. at 1034 - 1035.
/8/ Id. at 1032, citing Galliher v. Cadwell 145 U.S. 368, 373, 36L. Ed. 738, 12S. Ct. 873 (1892); Rosemount, Inc. v. Beckman Instruments, 727 F.2d 1540, 1550, 221 USPQ 1, 10 (Fed. Cir. 1984) (patentee denied damages because of a three-year delay); see also Meyers, 912 F.2d at 1462-63, 16 USPQ2d at 1057-58; Advanced Hydraulics v. Otis Elevator Co., 525 F.2d 477, 481 n.2, 186 USPQ 1, 4 n.2 (7th Cir. 1975).
/9/ Id. at 1033.
/10/ Id.
/11/ Id.
/12/ Wanlass v. Fedders Corporation, 145 F.3rd 1461 (Fed. Cir., 1998).
/13/ Id. at 1464.
/14/ Wanlass v. General Electric Company, 148 F.3rd 1334 (Federal Circuit, 1998).
/15/ Id. at 1338, citing Johnston v. Standard Mining Co.,148 U.S. 360 (1893).
/16/ Id. at 1339.
/17/ Id. at 1340.
/18/ Hall v. Aqua Queen Mfg., 93 F.3d 1548 (Fed. Cir. 1996).
/19/ Wanlass v. General Electric, at 1340.
/20/ Paula D. Hayman, "The Laches Defense in Wanlass v. General Electric and Its Effect on Patentees' Duty to Police Their Rights," Syracuse Law Review 50 (2000): 1151.
January 16, 2002
http://www.converium.com/web/converium/converium.nsf/0/5731FF9F4372B6ED85256B43006EA07D?OpenDocument
Ghors; In regard to statutes of limitations, I previously ran across this article
“Doctrine of Laches and Patent Infringement Litigation”
(Note: I copied the URL, but for some reason it does not open. I will give the entire article on my next post)
Am I reading it correct, that statutes of limitation do not apply in patent infringement cases, rather, 35 U.S.C. Section 286 permits recovery of damages only for infringement that takes place during the six-year period preceding the commencement of the lawsuit. If so, at least six years of damages could still be collected. In the case of IDCC, that would still allow substantial recovery.
Brief mention of IDCC. At least the writer knows IDCC is in the Intellectual Property licensing business.
OUR TAKE
Rambus: Risky No More?
By Dave Mock
February 19, 2004
Shares in silicon memory pioneer Rambus (Nasdaq: RMBS) once again jumped double digits yesterday to just shy of $35 per share, a gain of over 35% on the day. As the lead player in the hypergrowth cast of characters from the late 1990s, Rambus has survived and thrived to the glee of long-dedicated shareholders.
What moved the stock yesterday was the dismissal of an FTC antitrust case against the company. Government regulators had been scrutinizing Rambus for what competitors claimed were sneaky business practices. Rambus allegedly manipulated standards-setting processes in the memory market in order to lock in its proprietary designs and later demand royalty from them.
While the full report is not due until Monday, the statement makes it clear that the government didn't buy these assertions. True, the decision by the single judge is still open to review by the full FTC commission and the case could end up in appeals. However, this early indication from the FTC that the evidence did not merit a case in the first place lends a big boost to Rambus' credibility on the legal front.
So, has Rambus now truly crossed the bridge into legal legitimacy, where investors can more properly value the business without the huge risk of litigation overhanging? I believe so. Note that this doesn't necessarily mean that the risk level on the stock is down. Investing in the company is still far from a no-brainer -- it continues to carry a high valuation and is open to extreme volatility with other ongoing litigation. But going forward, Rambus will be easier to assess as the business matures and the impact of various lawsuits diminishes.
Recent historical precedence with peers such as ARM Holdings (Nasdaq: ARMHY), InterDigital Communications (Nasdaq: IDCC), and Qualcomm (Nasdaq: QCOM) shows that turbulence in the early years gives way to stable business models as the industry and market mature. While investors may think the big money has already been made, the future still holds potential surprises for a savvy buyer who doesn't overpay.
Still, a decision for placing your own hard-earned cash into Rambus shares should be based upon more than the average level of research. Companies that derive substantial revenue from licensing intellectual property and royalties encompass very complex business dynamics. This added twist can make the task more difficult, but also more rewarding.
If you've been a follower of Rambus on Fool.com for even a short time, there's obviously nothing new for you here -- move along! But if the company is now catching your eye and you want to learn more, the Rambus discussion board is the best place to get schooled, bar none.
Motley Fool contributor Dave Mock does not own shares of any companies mentioned in this article.
Reuters
UPDATE - Samsung Elec sees 10 pct handset growth in Q1
Wednesday February 18, 10:56 pm ET
By Jean Yoon
(Adds details, updates shares)
SEOUL, Feb 19 (Reuters) - Samsung Electronics Co Ltd (KSE:005930.KS - News), the world's third-largest maker of mobile phones, said on Thursday it expected to sell 17 million cell phones in the first quarter, up 10 percent from the previous quarter.
The estimate represents an almost 30 percent jump from the same quarter a year ago, well above expected annual growth of 17 percent. But analysts said Samsung's numbers were still conservative and below their forecasts.
"We expect to sell around 17 million mobile phones in the first quarter," a company source told Reuters. "The expected rise is on the back of a fast-growing global handset market. We also expect healthy demand from Europe's emerging markets."
Samsung, which has wooed consumers with sleek, folding mobiles incorporating colour screens and cameras, has aggressively sought sales in emerging markets as well as from pickier customers in rich countries, putting pressure on rivals Nokia (NOK1V.HE) and Motorola Inc (NYSE:MOT - News).
Mobile phone makers are benefiting from booming emerging markets such as China, India, Brazil and Russia, where they sell relatively cheap handsets to first-time buyers, as well as from existing customers in the United States, Europe, Japan and South Korea, who are replacing old models.
Smaller rival Siemens AG (XETRA:SIEGn.DE - News) of Germany said on Tuesday it expected to sell "substantially" more mobile phones this quarter than in the year-ago period and aimed to keep its global market share above 10 percent.
Samsung sold 15.5 million handsets in the fourth quarter of 2003 and aims to sell 65 million cellphones this year, up 16.9 percent from 55.6 million last year. The handset division accounted for about a third of Samsung's profit and sales in the fourth quarter.
Shares in Samsung Electronics, Asia's biggest technology firm with a market value of $77 billion, were up 0.8 percent at 553,000 won at 0345 GMT. The stock has risen 22 percent this year and hit record highs, beating a nine percent rise in the broader market (KSE:^KS11 - News), as investors eyed its bullish earnings outlook.
RAISING FORECASTS
"Samsung's handset shipments are growing strongly in the first quarter. The company's GSM exports to Europe are showing the strongest growth given new model launches and the weak Korean won against the euro," said Koo Bon-jun, an analyst at Smith Barney.
Smith Barney, a unit of Citigroup, raised this week its first-quarter sales forecast for Samsung to 19.3 million handsets from 16 million. It said Samsung's export and domestic average selling prices are slightly up thanks to increased high-end phone sales.
Reflecting the stronger average price, the investment bank raised its forecast for Samsung's first-quarter handset operating margin to 22.5 percent from 19.7 percent.
Deutsche Bank said it saw Samsung's shipments at 19 million in the first-quarter and 75 million for all of 2004.
"This is particularly impressive given that globally handset shipments in the first quarter historically fell 10-20 percent quarter on quarter owing to weak seasonality," Deutsche Bank said in a note to clients.
According to three key research groups that follow the handset market, global mobile phone sales to consumers topped 510 million units in 2003 and will exceed 560 million units in 2004.
rayfer: My advice would be to forget about the past, and try to learn from what you think you did wrong. Dwelling on "what if" is non productive and a wasted effort. I am sure everyone on the board would be very wealthy based on "what if " scenarios.
Could someone who is familiar with IDCC’s business model please explain how IDCC would collect for the four technologies mentioned in today’s press release. I assume that the related IPR involved with one/or more of the technologies would be licensed to whoever wants to use it. However, would the license be just for the particular technology, or would it be part of an overall package, and how would it work if the company involved already has a package license with IDCC?
OT: Robert Black also has a pretty good Daily Market Wrap where he picks up and reports news items, analysts' reports, and commentaries that have been made about the day's market action and companies involved.
http://www.robblack.com/rb_marketwrap.shtml
rmarchma: Since you are getting into technical analysis, from what little I understand, today's action would appear to be at least a daily up gap, which according to this definition is bullish.
Gap - Up/Down An up gap forms when a security opens above the previous period's high, remains above the previous high for the entire period and closes above it. Up gaps can form on daily, weekly or monthly charts and are generally considered bullish. A down gap forms when a security opens below the previous period's low, remains below the previous low for the entire period and closes below it. Down gaps can form on daily, weekly or monthly charts and are generally considered bearish.
ams: If the stock purchase was for the purpose of changing or influencing control, they cannot buy any more shares during the 20 day period after they acquired the 5% interest. (10 days until they file the 13D, and 10 days after)
"From the time the person has acquired or holds the securities with a purpose or effect of changing or influencing control of the issuer, or in connection with or as a participant in any transaction having that purpose or effect until the expiration of the tenth day from the date of the filing of the Schedule 13D pursuant to this section, that person shall not:
i. Vote or direct the voting of the securities described therein; or
ii. Acquire an additional beneficial ownership interest in any equity securities of the issuer of the securities, nor of any person controlling the issuer."
<<Can they then accumulate as many shares as they like during those 10 days,? or do they have to desist from purchasing shares.>>