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Revlis, thanks for staying on top of things
I appreciate your efforts.
My new favorite word... "supposedly"
Seems someone who owns a gavel is letting Nokia know that this little manuever was noted and not appreciated.
Let's all say a prayer
for Judge Luckern's health. When I first saw Loop's post, I was thinking it was the ALJ at the ITC and my stomach dropped. I quickly remembered Barefoot was the judge in our years ago case, but that was an unpleasant second or two.
Sanders and Pumprey passing reminds me that Judge Luckern in his 70s, and if he were not able to complete this case (and Nokia) for any reason that would throw another huge delay at IDCC getting resolution. It's a very morbid and inappropriately selfish thought, it was the first thing that popped into my mind.
Equitable estoppel relates to fairness! WTF
Am I understanding this correctly? SAM's equitable estoppel defense regarding the existance of an implied contract is based on the un-f'ing believable premise that it would be unfair to SAM unless the convoluted Fremch contract framework that does not include mutual consideration is allowed to be enforced. My goodness, if that is why Levi says no violation, he is an absolute moron. I cannot believe Judge Luckern will buy into that defense. There may be other reasons to conclude not violation, but if that defense succeeds then either me or the legal system is FUBAR.
Speaking of Mr. Levi, as I read the transcripts, the staff appeared to be pretty wishy washy. Had very little to say, often said in essence "whatever you think Judge" and did not show much conviction or confidence in his own opinions (and with good reason IMO).
There's a difference between justice and the law
While you have very accurately summarized the feelings of anyone associated with IDCC over the years of this journey, I don't know that it is relevant in the case before the ITC.
in my mind, the bottomline with the alj, he knows why he has a job. international, and/or foreign companies take advantage of U.S. companies' IP without paying for it. that's why the ITC was created, (i assume). he's shouldn't be looking for esoteric angles by which to absolve the abusers. he has seen the CCA decision that nok had been abusing idcc in multiple venues for years.
he gets it. teeth. my grandpa, what big teeth you have.
all the better to bite nok and sammy in their fat, overpaid asses.
The law is structured with all sorts of rules and procedures. There are often contradictory precedents to be considered and distinguished. Important information may be excluded because of the rule of law. For example, I believe that if one is acquitted of rape charges, that charge may not be brought up as evidence in a new rape case, although it seems fairly obvious to lay people that the prior case is an important fact. A confession or key evidence can be excluded because it was not obtained within the legal requirements. The reason I do not have a strong opinion about the outcome of the ITC case is that I do not know what information is most important and what is not. In my reading of the testimony (which obviously excludes day 1 and 2 and the private sessions) I did not see any reference to the pattern of engaging in every legal challenge available without regard to the merits of the case, not with the primary goal of winning, but primarily to delay the contract. The strategy is to delay payment (time value of money) and to force IDCC to settle for a lower amount than they deserve just to get the contract signed during our lifetime. Should this be a factor? Common sense says yes, but I don't know that it is relevant before the ITC. I hope if the case is a toss up under the ITC criteria, Judge Luckern will consider the tactics and strategy used by SAM and NOK and send a message that this type of stonewalling and refusal to negotiate in good faith will not be ignored by the ITC.
I do hope that on this occasion the law aligns with justice and Samsung faces the import ban. That will create time pressure on them to get a deal done. As we get close to November 25 I do think there's a good chance that threat will compel SAM to accept a fair settlement.
Missing testimony on FRAND
I think the strongest statement on rates would be the LG and other signed licenses, with would've been raised in the non-public sessions. It would be very tough to refute an arms length transaction between independent companies with no duress that has been paid in full by a top tier company. I think that will trump Mr. Ugone's esoteric patent counting methodology taken from a Nokia financed study using an arbitrary royalty cap set by the manufacturers.
Judge Luckern impressed me with his questions and his handling of the case from what I read. I feel confident he will gain an understanding of the facts and make a well reasoned decision within the law. That does not mean I think the decision is obvious, as I don't understand the parameters of the ITC and what constitutes the public interest. I hope it is set up to punish the tactics that SAM and NOK have been using. I doubt very much that Judge Luckern will be overturned as he is experienced and knows what he is doing.
One bright spot is if we were to lose, we do get a second shot in fairly short order with this practice run under our belt. Not exactly an ace in the hole, but it is something.
I think it is 50/50 that there will be a settlement. I also think it might be possible that the parties wait for the decision, then settle based on a prior agreement that is contingent on the decision. Like most here, I am hoping for a reasonable settlement, which to me means no less than LG. My hunch is that nothing will happen until mid November, but I will be checking every day with some hope.
Sammy's risk is beyond our current offer
IMO, the fact that we made an offer to SAM does not provide them with a worst case settlement. I strongly believe that any offer made in the past can be withdrawn. Let's say you were negotiating to buy an oil rig in the gulf a month ago and made an offer that was not accepted. When Ike began you would pull that offer off the table. Maybe the seller gave you a reduced offer as the storm got nearer. Now it's passed and the rig is undamaged. Do you think you can go to the seller and say, okay, now I accept your offer? No way. Similarly, there is no way SAM or any defendant in an ITC case could accept an earlier offer after losing the case. Otherwise it would be stupid to bring any action before the ITC if there is big risk and no reward.
This is just my opinion as I am not knowledgeable about the ITC, but your theory makes no sense - it would discourage any defendant to settle and my impression is that the ITC wants settlements, not decisions.
Frank
Bulldozer, Loop and others affected by Ike
You have been in my thoughts and prayers as I've been wathcing the news of the damage. I hope the recovery goes well for the area and you individually. I will make a donation to the Red Cross designated for the hurricane victims. God Bless you all.
Frank
Thank you Ghors and Whizzer
I appreciate your taking the time to read the hours of testimony, analyze it and sharing it here. I truly appreciate your efforts.
Frank
Lawyers please help me understand
I know from working with tax law that the law and common sense are often very different, so please respond to these two questions for me.
1. Hasn't IDCC been asserting their patents must be licensed and negotiating with Sammy and others for years. Isn't that IDCC's business model, getting paid for their IP? How could anyone ever say that Samsung did not expect IDCC to assert their patents?
2. Why not unilaterally set a rate for each declared patent. There is a range of reasonable prices. IDCC can use the criteria that support a higher rate. SAM would have to prove that the rate was unreasonable - so even if they could show a lower rate was more reasonable it would not matter as long as IDCCs rate was reasonable. I know there was a comment earlier that IDCC's case at the ITC asserts that there is no implied license so they don't want to take any action inconsistent with that position. However also mentioned was the S on the wall theory, where SAM is asserting defenses that contradict each other. IDCC can say we don't think the implied license is applicable, but if it is, then we are setting these rates for each of our ETSI declared patents respectively. At the very least, if the ITC buys off on the implied license defense, then the next day IDCC should set the rates unilaterally.
I appreciate any help with these simple minded questions as I am again baffled by convoluted process and tangental crap that gets debated when the issue seems so simple. Does IDCC have a license? No. Is any valid IDCC patent being infringed upon by Samsung? Yes. Therefore there is a violation and there should be an injunction. Yes, I know it is too simple and we have to spend years while lawyers get millions of dollars debating what "is" is.
Ghors, thanks for your analysis.
French law testimony
My reading of the testimony by Sammy's French law expert seemed to indicate that under French law for ETSI members, if the patent holder and patentee can't agree on a rate, then the patent holder can set a rate. The patantee can go to court to try and prove that the rate is unreasonable. Seems like something IDCC might want to consider.
I'm confused too
Like AndrewNCU, my understanding was if a foreign company was infringing on ANY patent then there would be a violation and the remedy available to the ITC was to ban the products from sale in the US.
Like Desert Dweller, I thought that without consideration there could be no contract.
Equitable Estoppel has me baffled because the first requirement is that IDCC did not inform Samsung that IDCC intended to enforce the patent against it. Declaring the patent to the ETSI seems to this ignorant laymen to be clear evidence of IDCC's intention to enforce the patent. Seems that IDCC would've had a reason to ask for summary judgment, yet somehow Samsung felt there case was so strong they could get a summary judgement. WTF??
Thanks to Squingebob and Revlis for sharing their experience and thoughts freely here.
The good news is that Samsung seems to acknowledge that they need to license. I think LG sets the benchmark for the value of the patents. I've worked on some business valuations for divorce proceedings and there are many different ways to compute the value. However if you are able to find a similar business that sold in an arms length transaction in the recent past, that would carry much more weight then all the discounted cash flow analysis reports. But that was from last century and involved restaurants, so it's probably not relevent either.
Yup, I'm confused. However I still see strong evidence that IDCC has essential patents and will get paid. When and how much are the billion dollar question. I believe IDCC management will get it done. I hope it's sooner rather than later.
The Staff attorney spoke early and said...
What? SAID WHAT??? You've got us all on pins and needles.
Bulldozer, you hit the nail on the head.
we will need recurring revenues, and we need to trade at decent multiples of these quantifiable recurring revenues.
While telling the world IDCC's story is a good thing, the real story that propels price is earnings, current and reasonably predictable recurring earnings. Reading stories about IDCC being inside Apple phones leads to interest in the stock. Reading financial statements that reflect the earnings from Apple and the MENS club will lead to a much higher share price. I know that once Mr. Merritt signs the big boys we will trade at a good multiple based on those recurring earnings.
My condolences to Mschere's family and friends.
Wizzer, thanks for your thoughts
I welcome anyone to comment on the substance of my posts, especially if they have different view, so that I might learn. It is especially welcomed from intelligent, informed people such as yourself, who look at the facts to arrive at conclusions (instead of those who start with their conclusion and try to connect dots to make the facts fit).
I agree with you that this battle is far from over, however I still believe that having the staff report against us does significantly decrease the chance of success. Fortunately we have a man with long experience who appears to be very competent and well versed, so I'm confident he will not hesitate to use his own judgment if it is different that the young staff. I would say that ALJ Luckern will be less likely to be influenced as other ALJs might be. (I certainly hope that he is in good health-we don't need another Pomfrey.) Nonetheless, this young staff is an unbiased opinion that sides with Samsung, so that does lower my expectations with the ITC. When I say I think IDCC is an underdog, I mean about a 40% chance of success, not a long shot. I look forward to you, Loop, Ghors and other legal eagles help us understand how things are going when we get the transcripts.
Here is the article on which I’m basing my opinion that the staff report does generally indicate the direction of the ALJ's opinion. This was first posted by who else, Olddog. The relevant sections for this discussion are headed “Speed at the ITC” and “Certainty of Outcomes from the ITC”. It states that: “historically the ALJs have come down on the same side as the staff attorney”, although as you noted, no statistics are provided. It does provide statistics on the reversal of ALJ’s by the full commission (6%) and overturning of the ITC decisions by the Federal Circuit (16%).
http://209.85.173.104/search?q=cache:r7HehEf6nSwJ:www.ipo.org/AM/CM/ContentDisplay.cfm%3FContentFileID%3D6491%26FusePreview%3DYes+ITC+and+staff+pre-hearing+statement&hl=en&ct=clnk&cd=8&gl=us&client=safari
Rough day yesterday, but some things to remember
First, thanks to Revlis for attending, and Lastchoice for getting the information to the board quickly.
The wonderful thing about the ITC from IDCC's perspective is that we don't lose anything if we are not successful. If we win, we get an injunction, which is a very strong incentive for the infringer to settle. If we don't, we are back where we were before, needing to go to court to get enforce our patents. I'm not saying this was not bad, it is. The staff report means we are less likely to prevail at the ITC, so we lose some bargaining power right now. However the hearing is ongoing, and the ALJ will render his decision based on all the evidence. However based on ITC history, I'd have to say we are the underdog right now.
Losing at the ITC means that we are back to the seemingly endless litigation, so IDCC will likely need to come down a bit in their requirements because getting a lump sum five years from now does not help the stock like getting recurring revenues will. The ITC is a shot to give us leverage and put a relatively short clock on getting contracts. If we don't get it not much worse off. As loop mentioned, the ITC decision is not binding in other courts.
I believe IDCC is confident in their position. I believe they knew what was in the staff report when Mr. Merritt commented that they turned down an offer that they would've taken in the past because they want to get full value for their IP. Management is experienced and knowledgeable. They are not caving in. Sammy's attorney said they felt our offer was double FRAND. That seems to be an acknowledgement that they do infringe on our patents. To be conservative, let's say IDCC offer is at the bottom of their stated range of $1-$2 a unit, so Sammy is saying 50 cents a unit is FRAND. Not the homerun we are hoping for, but would certainly support a much higher share price than where we're at today.
If we do not get an injunction against Sammy, we will have a second shot with some insight into the process when we take on Nokia. Nokia knew what the staff report was and yet still is fighting to avoid the ITC, so they know there is risk.
Bottom line, I am very confident IDCC has valuable IP - Samsung appears to have admitted that, even if they disagree on the value. I believe that they will get paid at a rate that will generate a much higher stock price. It will require even more patience. Selling at these levels is not a good choice if you’re in it for the long haul. So I'm staying with my investment in IDCC and am comfortable with it.
Boring blog like stuff if anyone is interested.
I couldn't sleep Monday night, not due to worry, but due to excitement and anticipation. Like I felt the night before the 49ers' last three Super Bowls. Very confident of victory and looking forward to seeing it come true. Was up at 6, checking the board. Finally decided to take a shower while waiting for news from the hearing. Come back to my computer and we're down 5 points. Shit. Check out the posts, see the news and have to decide whether to jump out or not. After a couple minutes of soul searching, decide that the bad news is more than fully taken into account and hold all my shares. However decide to sell my mom's shares, as she gets very nervous and the roller coaster is moving into a very wild section. After making my decision, I decided to walk away from the computer. I went out and spent 5 hours just doing things I like, including a good hard hour of racquetball that really helped me get rid of the tension and stress. Read the board when I got home - no big surprises. Slept like a baby. Now it's back to normal for an IDCC investor. Waiting and waiting for them to sign the next contract.
IDCC did know the decision
It was given to IDCC and Nokia the day before Nokia threw cold water on the "substantial progress" statement by IDCC. It also may explain why the buyback has been progressing so slowly. Damn.
However it does seem odd that Nokia would go to Judge Batts if the ITC was going their way. But maybe they figured avoiding the ITC is better than taking a chance.
Olddog, re: arguing with Mschere
There is no point to it. Putting IMO in front of a post gives him carte blanche to say whatever he wants without ever being wrong. Why? Because while his statement may be factually wrong, he is just stating that it is his opinion, which it is. Of course, he will defend his position with various off point or misleading replies. He is not about finding facts, he is about defending his position.
Here is the best example of what it means to argue with him.
I appreciate Ronny's very accurate projections
He "missed" by $8 million of a previously undisclosed expense adjustments, which no one could or did project. Absent that he was right on, as usual. Since he posts details of his estimated income and expense, he can identify where he differed from the actual results. This is as good an analysis as one could hope for. Yet he owes the board an explanation for his choice of words. Sheesh.
You "thanked" Ronny for his contribution, but it rings hollow when it is preceded by your accusingly questioning his use of the term rabbit, which I understand to mean a positive earnings surprise, to have some unethical connotation and then accuse him of sour grapes. He had no reason for sour grapes because his "miss" was due to unknowable items. If you read and understood his explanation, it should be clear that he was just clarifying the difference so that those who followed his projection would fully understand what was actually reported. Anyone who has a basic understanding of financials is well aware that the adjustments characterized as "a rabbit" could in no way be considered a impropriety of any kind.
But Ronny got tired of waiting for IDCC to monetize its IP, therefore his motives are suspect and his posts must be carefully scrutinized for negative bias or unfounded attacks on the company. It can't be that he still follows the company, watching and waiting for a time to re-enter, and decided to share his expertise with everyone here, as requested by some naive posters who foolishly think he might be willing to share his unbiased opinion without being heavily invested.
If I added "thanks for all your contributions" here, then would this post also not be critical?
Passing on the cost
Gary and others, I understand the mindset that if someone is going to buy a phone for $186, they would still buy it for $188. However when the manufacturers price their product, they don't sit down and say
"Here are our costs, here is the profit we want, so we will price it at the combination of those two."
Is IDCC basing their request for royalty rates based on their investment in the IP, or is it based on what they believe it is worth and what they can get in the marketplace?
Manufacturers sell it for what they can get. They work very hard to maximize revenues based on what the market will bear. Cost will provide a floor for selling price, and if they cannot generate sufficient revenue to meet and exceed that floor, then they will exit the market. Therefore the amount they pay for IP impacts their bottom line. However, to be fair, if all manufacturers have to incur the same cost they will not be at a competitive disadvantage in regards to that cost, but the overall demand will be slightly less at the slightly higher price.
Hi Data, thanks for your reply
I appreciate your thoughts. It's tough for me to think that Nokia can f with IDCC and end up with no worse a deal then if they had acknowledged IDCC's IP and paid for it on a timely basis. There's still a part of me holding on to the belief that IDCC can charge what I call a PIA premium. I would love to see IDCC get an injunction against Nokia so IDCC can show Nokia what it's like to have someone jerk you around to squeeze every last cent out of a situation.
I'm in the anti apeasment camp (Great analogy, JD Gator). I hope IDCC does not settle unless they get a deal on their terms, which means to me that Nokia does not get a deal better than LG. What do you think QCOM was getting offered before they won?
Well, I'm not as optimistic about a settlement coming soon, but I am still confident that IDCC will succeed in getting paid for their IP. Maybe it won't be what I think they deserve, but I will be holding IDCC when this finally comes to its conclusion.
Data,
What follows in italics is my layman opinion based on common sense, not law or industry standards. Is it completely out of touch with the realities of licensing in the industry? Does this mean that each successive signer in affect gets to take on a MFL based on the licenses signed to date? That there is no downside to delaying licensing? If that is the case, any company would be foolish to sign until compelled by legal action. It seems unfair to the licensor and early licensees and bad public policy because it encourages IP users to avoid licensing. As a CPA, I understand that fairness and logic have little to do with tax law, so I’m not attacking your post or trying to argue with you. I just want to clarify if this is one of those situations where fairness has nothing to do with how things work. Maybe I’ve got a bit of a rose tint to my glasses as well.
For years MENS has been resisting licensing on any terms. IDCC has declared its patents as essential agreed to license on FRAND terms. IDCC has been trying to license on FRAND terms for quite a while. So if we need to go to trial to determine FRAND, that's okay with me. Finally the infringers have motivation to get a licensing deal done, so sign them on FRAND terms now that they have an interest in coming to an agreement.
However FRAND is not an unchanging amount. Like gas prices or housing prices, the Fair and Reasonable price changes. So if patents are challenged and found essential, if your products are found to infringe on non-essential patents, then the fair value goes up.
Non-Discriminatory means that you can't charge higher rates to similar licensees. It does not mean everyone pays the exact same rate. There are volume discounts available. If you are a little guy, you pay more than the big dog. If you pay in advance, you get a discount. Similarly, if you negotiate in good faith and sign without legal action, your rate should be better than someone who's rate includes an increase for forcing IDCC to incur legal expenses and prove the validity of its IP. Those are different types of licensees and should pay different rates under FRAND.
Also, is it unheard of for companies to license each other as separate agreements instead of cross licensing, where the net licensing rate is applied? Can't IDCC go to Nokia, look at it's other licenses to none-IP holders and use that as the rate to pay for Nokia IP, then negotiate the rate of IDCC's IP from Nokia based on it's market value? That way the difference in relative volume does not skew the results?
I'd really appreciate your honest opinion about these questions. Common sense is on IDCC's side, but I want to know what the reality is in the real world.
Thanks,
Frank
Loop, Brilliant. IDCC board monitor, take note.
It is a simple argument that delaying payments does not cause irreparable harm because the money can be repaid with interest, but it is simply wrong. Loop has done a great job of spelling out the irreparable harm that delay causes IDCC. This needs to be made clear to the judges so that they can see past the simple to the complicated truth. IDCC board monitor, please forward the italicized portion of this post to the appropriate parties at IDCC for consideration.
IDCC is a prime example of a company that truly does suffer irreparable harm as a result of infringement, but I have not seen a lawyer make the presentation in such a manner that is clear to a judge. Most show that the client is losing income and stop because that is what they understand. They talk in terms of royalty rates and sales in the industry, but fall short of painting the real picture. The real picture must show that time and present day loss of revenue does in fact produce harm and the loss is absolutely irreparable. It may be that royalty may be recovered down the road, but the value of the corporation cannot be recovered. I have yet to see a lawyer present a witness that can demonstrate the loss of market cap over a period of time of no recurring revenue versus the receipt of the money in a lump sum down the road. This is caused because the infringer is allowed to continue capturing market share without paying IDCC for the IPR being used and blocking market penetration from companies who have licenses with IDCC and would be paying IDCC for the market share being controlled by the infringer. Thus, the loss of recurring revenue over the period of infringement makes it impossible for IDCC to share in the multiples for evaluation by the market analysts causing a severe distortion in market cap which is a bell weather of company identity and the ability to have access to the credit lines available to companies who are receiving recurring growth in quarterly revenue during the infringement period. Once IDCC receives a large sum as replacement for the royalty owed over the time of infringement, the market analysts value this event wholly different from the recurring growth model and the difference in the two evaluations is lost forever which is the irreparable harm that must be demonstrated to the courts so they understand the harm being caused by the deep pocket infringer. There is an art to portraying damage models to the courts and it takes a little imagination which has been stifled by the time and money replacement rulings which were handed down by the courts who do not believe in the injunction. The injunction opponents view the use of an injunction as a death penalty and so long as a bully can pay the harmed party dollars down the road, they believe the injunction should not issue. The damage is much more than a simple dollar replacement plus interest. There are losses to market cap, ability to budget, ability to plan, ability to receive credit lines, ability to enjoy public recognition and a whole host of other items that are irreparable and cannot be recovered in a suit for infringement. The very idea that the legislature is even considering limiting damages for past royalty almost mandates that lawyers get more creative in painting the true damage picture being suffered by his client because of the actions of the wrongdoer.
Absolutely spot on. A company with signed contracts and recurring royalties (see QCOM) is viewed and valued in a much better way than a company that fights and gets paid in lump sums that are difficult to predict in amount and timing. Even if the overall revenues, including adjustments for interest, are the same, the value and prestige of the companies are vastly different. Also it makes the stock much more volatile, which further discounts its price in the market.
I agree about teecee
I tend to believe what TC reports. You can dismiss the rumors and his opinions which I do not but any reporting he does I found to be accurate.
I believe he was relaying exactly what he perceived from his day at court. It was a service to all of us for him to spend his day there and to report back publicly. He can't be faulted if one's expectations from that report were overly optimistic (like mine were).
IMO he posted his honest impressions in a timely fashion. I sincerely appreciate that effort and generosity in sharing the information.
There's nothing wrong with a FRAND rate
For years MENS has been resisting licensing on any terms. IDCC has declared it's patents as essential agreed to license on FRAND terms. IDCC has been trying to license on FRAND terms for quite a while. So if we need to go to trial to determine FRAND, that's okay with me. Finally the infringers have motivation to get a licensing deal done, so sign them on FRAND terms now that they have an interest in coming to an agreement.
However FRAND is not an unchanging amount. Like gas prices or housing prices, the Fair and Reasonable price changes. So if patents are challenged and found essential, if your products are found to infringe on non-essential patents, then the fair value goes up.
Non-Discrimintory means that you can't charge higher rates to similar licensees. It does not mean everyone pays the exact same rate. There are volume discounts available. If you are a little guy, you pay more than the big dog. If you pay in advance, you get a discount. Similarly, if you negotiate in good faith and sign without legal action, your rate should be better than someone who's rate includes an increase for forcing IDCC to incur legal expenses and prove the validity of its IP. Those are different types of licensees and should pay different rates under FRAND.
I've been waiting a long, long time for IDCC to get FRAND licenses with everyone, including all the big boys. I will be very happy when it happens. I probably shouldn't say this, but I really think we may be very close to our real watershed event when we can break out our calculator with a lot of zeros and see the chart of our income and share price looking like a hockey stick. To quote MickeyBritt, IDCC is a SCREAMING BUY!!!!!!!
You can trade options in an IRA
You're custodian has to offer it and you have to meet their option trading requirements. I just funded my 2008 SEP to get some of my tax season income into IDCC and I was surprised to notice that the paperwork indicated that the account could trade options.
Poison pill for buyout
The only number I remember was the $250, but that was part of a complicated stock transaction strategy to frustrate a hostile take over. No management would ever put in a poison pill to prevent them from entertaining a good offer. While I'm very optimistic about IDCC's future, if they had an offer of $120 per share tomorrow I would jump at it and I'm sure the BOD would too. I would be shocked beyond belief if IDCC had something in place that would be a roadblock to a friendly offer that management and shareholders wanted.
btw - $120 was for example only, there is no way we'd get an offer like that. However I would not say that the stock couldn't hit that level in time if they can successfully execute their business plan.
IDCC a patent troll?
Olddog, I threw out that term because I know IDCC has been called a patent troll (and a tax collector) by opponents to somehow make a case that they aren't entitled to royalties. I don't care what they call IDCC, the fact is that if IDCC has the patented IP required for a product, then they are going to do whatever it takes to get their rightful payment.
I don't worry about pejorative terms and when I one is used against me I will often adopt it to show I don't care what you call it as long as I get what's due. (My handle, The Count, came from someone trying to insult me for being an accountant. I had other connections to the term, so I took it as a new screen name.)
So if patent troll has a negative connotation that implies illegal or unethical business practices, no, IDCC is not a patent troll. However if a patent troll is a patent owner vigorously enforcing their patents, then I hope to hell that IDCC is the biggest damn patent troll in the world. I'd love to read a Nokia message board filled with bitter posts about how that miserable tax collecting patent troll IDCC is taking such a huge percentage of their sales revenues "just" for inventing the technology they use to build them.
Frank
Last and My3, I agree
I think that Nokia's cross licensing agreements would prevent them from getting the value that IDCC can as a patent troll. That's why I think it's very unlikely, but I don't think it's impossible.
Paheka, nice post!!
From Nokia's perspective, it would make a lot of sense to buy out IDCC. They've been operating under the theory of why buy the cow when you can get the milk for free. However that time is rapidly coming to an end. So yes, I could see Nokia considering a buyout and trying to keep IDCC's share price down.
However I'm hoping that IDCC management would not entertain any offer that is not far, far higher than we are now. They can see the earnings stream forming and do the math to see what the stock will be worth. I would also hope that holders of the stock would not jump at a tender offer just because it looks good based on today's price.
You make a good point - a Nokia buyout could be a very profitable move on their part if they can buy IDCC cheap. I wouldn't mind them bidding up the price but I would probably be strongly against accepting the offer because I believe IDCC's value is a multiple of the current price, and once the contracts are signed it will be obvious to the street. So while I believe Nokia is smart enough to try it, I also believe IDCC is smart enough not to go for it.
Loop, great post
These two giants finally not only stand to lose plenty of pre-planned revenue projections, but all four of their faces at the same time. So, what is it going to be fellas? Do you license the technology and go away with positive press with only IDCC, its shareholders and a few government employees knowing what true pricks you really are?
Brilliant.
"All four of their faces" - I literally laughed out loud.
ShallowMind - Nice post. Thanks.
Why didn't Nokia as for April 1
My guess is that everyone in the room knew that she meant April 11 and that she simply mis-spoke. If IDCC's lawyers could do Jedi mind control and get the court to change their decision, they would've done something more important than kick the date back 10 days.
Wanda,
QCOM won a court case that established that if you want to make a 2G phone you have to license with QCOM. That gave them the leverage to negotiate a good rate. You may want to look at QCOMs negotiations with Nokia regarding 3G to see that there is no Svengali negotiator that can get the big boys to sign without great effort and legal challenges.
Read the analysts reports on IDCC, especially Tom Carpenter of Hillyard Lyons. Tom has followed IDCC for a long time and has an excellent understanding of the situation. If you need help finding them I'm sure others here can point you to them.
If you can stand a lot of volitility, I suggest you buy at these levels. Risk/Reward is very positive in my opinion, short term and especially long term.
Paheka, please think more and post less
You love to complain about everything that could be hurting your investment, whether it be shorts, IDCC's lawyers lack of interest in the case or a black cat crossing Mr. Merritt’s path. It gets old reading posts that all have the same message, though never directly stated, which is "I made a great investment, the share price isn't where I want it, so I need to find someone (other than me) to blame for this underperformance.
I am very grateful for the attorneys’ contributions here to help me keep up with the progress. However they are hampered by the large amount of information that is not available to them due to all the sealed filings and confidential discussions. They also have an interest in IDCC and have followed this saga for so long, seeing what we believe is the lack of good faith and hubris of MENS, that there is a natural expectation for justice to be done based on the entire history. The judges have not yet taken all that into account. So we've received some ruling that we believe are totally wrong. This does not mean that IDCC lawyers are not competent. It means that the legal system is tricky.
IDCC has hired prestigious firms with highly regarded attorneys with a wealth of experience. The attorneys here have commented favorably on our representation.
However all that really isn't the point. Shareholders are not here to manage the company. Management has the experience, information and desire to handle this. They are going to do it. There is no way you are going to affect this at all, so just let it go.
To sum up, you have no legal background so cannot make an informed judgment on the legal skill of our attorneys. Shareholders have no say in the day-to-day management of the company. So please try to keep your kevetching to yourself. It's okay to have an unposted thought.
Thank you Whizzeresq and Ghors
I really appreciate your wonderful contributions here.
Brad, we are here for different reasons
You're here to make sure management gets the full benefit of the doubt and to see how your friendly wager on IDCC (5% of your net worth, 1%, less??) turns out. This is your little game to see if you can pick one to beat the experts, but you would only use speculative capital that you can afford to lose. I follow IDCC because I do absolutely make buy, hold and sell decisions based on the news and how I interpret it. It's not an academic discussion for me. You forget that some of us are here to learn about our investments so we can make decisions. We are our own money managers. So it does matter to us because we do trade. What's a waste of time and emotion is following IDCC so closely when you never act on any information. Why do you waste so much time and emotion on it is a better question.
I follow the expert opinions here and I greatly appreciate them. However just because one has experience does not mean that their opinion has worth. You ask Bill Clinton or George Bush Sr about who is best to lead the country and I can guarantee Clinton will pick the Democrat and make a good case, while Bush will choose the Republican and defend his position. Similarly, you will always defend management with the fall back of since they know more than we do, we can't judge. Insightful stuff. So while you may put out a good argument it will always omit any compelling counter arguments, although you do love to throw stawmen up.
Nothing was made up from whole cloth today. IDCC traded 900,000 shares and plummuted 10% in minutes. That is a real event. Yes, I want to understand why that happens and make sure that there was nothing beyond that seemingly innocuos statement to cause the drop. You can see my recent post about catylsts and causes. The Nokia statement was just a catalyst, so it does not affect my long term outlook.
You again ignore what I write and make up my positions from whole cloth. I am very happy to have gotten the color from the court room. I appreciate the efforts of all those that went and reported, and the lawyers that provided their thoughts. After seeing Olddogs post about how IDCC has posted FD in the past, I now believe I was wrong with my guess of why the negotiations were mentioned in the 8K. IF they had been FD, I would have no problem with it. My concern with the disclosure, as I posted Monday, was if the contract was not done then don't expose yourself to potential embarrassment. IDCC had some disappointing news Thursday, yet is up ~5% in the two trading days since then. I don't see a disaster here. Just based on the way IDCC has been publicly embarrassed in the past I was very surprised by the 8K, and I was trying to come up with a logical explanation for putting it out so I could trade accordingly. I put my theory out and I'm glad that Olddog posted his reply. It's information I can use to adjust my thinking.
I ask questions and put out my thoughts to get feedback. I am here to learn, not to preach. However you on the other hand, have a Pavlovian response when you see something that could be construed as criticism of management. You have to discredit the poster. Sorry, Brad, but if anyone takes the time to read my posts they will see I have no axe to grind. I have not criticized management, I just tried to understand why they did what they did so I could make an investment decision. I had picked up some stock on margin when the price was in the teens, and with the potential for big news, I sold the margin stock yesterday and bought some calls, eliminating the margin debt and positioning for the upside. You can go back and clip your coupons, I'm here to invest.
I'd be happy to read and respond to anything further via PM.
Danny, that would make me the winner
OK you win hands down in the contest over who can come up with the most ridiculous reason for the 8K and let me tell you there was some REAL competition there for awhile.
I'm the one that speculated that the reporting of Shay's comment not to worry too much about April 11 and his confident demeanor may have been considered a disclosure under the FD regulations. I'm not a Wall Street expert, but it seems to me that his communication that he is not worried and that April 11 won't be an issue, however subtle, that was interpreted by many on public message boards to mean that something was in the works, just might put the company at risk when it turns out that the interpretation was a reasonable one and also happened to be correct. Seems to this neophyte that a case could be made that there was an inadvertent disclosure.
But of course, management personnel never make mistakes and it's just us wild eyed investors creating things out of whole cloth again. I'm glad I gave you a laugh. Tell me again why they issued that 8K, because I'm obviously clueless.
Why did IDCC put out the 8K
In my referenced post I was concerned about IDCC putting the 8K out prior to the ink drying on the contracts. Based on the way IDCC has been burned before, I came to the erroneous conclusion that it must be virtually a done deal. However last night I came up with a theory on why the 8K was issued. I think it might have been to comply with FD regulations. After teecee reported his conversation with Mr. Shay (thank you teecee and ELI for going and reporting back), it may be that the comments and big smiles of Mr. Shay may be considered a disclosure of negotiations with Nokia. Therefore IDCC released the 8K to report active negotiation progress to all investors. I just can't imagine IDCC issuing a statement without having a compelling reason. Note that the statement itself is very sparse and gives no indication of time or the work yet to be completed.
"Nokia Corporation and InterDigital are in settlement discussions and have made substantial progress towards resolution of all disputes between them."
My take is that Mr. Shay had reason to believe that negotiations were on track to be completed by April 11, which is why he was not worried about that date. Now Nokia has, in typical fashion, splashed cold water on IDCC. My hope that this is just another negotiating ploy and IDCC will not give an inch, and the deal gets done within a month. My fear is that the staff report came back more favorable for Nokia than had been anticipated so Nokia is pulling back from an agreement.
As always, it's wait and see time. I still am very confident in IDCCs future and I still think the stock is dirt cheap at these prices. I was hoping for a quick follow up of a license to create a short squeeze, so I bought some June 30 calls. Those may not work out (I still think they will), but buy and hold still looks like IDCC is incredibly skewed to the positive on the risk/reward scale.
One final thought. I made trades yesterday based on the 8K. I read what was said, drew my conclusions and invested my money. That was my choice. IDCC did not lie or mislead. Their statement is accurate. Nokia's statements do not dispute it at all - they do dispute the investors' actions as indicating that the market was more optimistic about a settlement than they are. If anyone traded based on that information, the results of the trade are yours, good or bad. Don't blame the company if you read more into it than it said. If there is no deal with Nokia for months I will be upset, but the trades I made will be my fault, no one elses. I won't be looking to IDCC to recoup my losses. If there is a deal with Nokia tomorrow, Sammy next week and Sony/Ericy the week after I will be thrilled and I will take credit for my investing choice and I will not send any of the profits to IDCC. I think that's the way this game is played.
``I'm a little less optimistic than the market implied yesterday,'' Simonson said in an interview in New York today. ``We always prefer to settle, but we will defend ourselves when the facts are with us.''