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Something else that I have been mistaken about is a possible sale of some patents. From the recent 10-K:
During 2022, we determined patent sales are no longer a part of the company’s on-going central operations and therefore will no longer be accounted for as revenue. We had no patent sales during 2022 or 2021 and $0.6 million of patent revenues during 2020.
Vegas Options - I am surprised to see that no stock was repurchased during the fourth quarter.
InterDigital (NASDAQ:IDCC) reported quarterly earnings of $1.08 per share which beat the analyst consensus estimate of $0.73 by 47.95 percent. This is a 54.29 percent increase over earnings of $0.70 per share from the same period last year. The company reported quarterly sales of $117.06 million which beat the analyst consensus estimate of $109.94 million by 6.47 percent. This is a 4.69 percent increase over sales of $111.81 million the same period last year.
InterDigital Reports Fourth Quarter And Full Year 2022 Financial Results
Source: GlobeNewswire Inc.
InterDigital, Inc. (Nasdaq: IDCC), a mobile and video technology research and development company, today announced results for the fourth quarter and full year ended December 31, 2022.
“We are thrilled to have delivered another excellent performance in 2022, highlighted by record setting level of recurring revenue of almost $404 million, Samsung’s recent agreement for binding arbitration to take a new license following Apple’s renewal in third quarter, and outstanding performance in consumer electronics, IoT/Auto licensing,” commented Liren Chen, President and CEO, InterDigital. “Building on the strength of last year and looking ahead to 2023 and beyond, I believe we are well positioned to deliver further growth in our smartphone core, build on our increasing momentum in consumer electronics and IoT/Auto, and capitalize on new opportunities in services that are built on our foundational innovations.”
Fourth Quarter 2022 Financial Highlights, as compared to Fourth Quarter 2021:
Total revenue was $117.1 million and increased 5%.
Recurring revenue was $103.6 million and increased 2%.
Operating expenses were $78.5 million and decreased 9%. The decrease was primarily driven by a reduction of non-recurring costs from restructuring activities.
Net income1 was $32.4 million and increased 48%.
Diluted earnings per share was $1.08 and increased 54%.
Adjusted EBITDA2 was $64.9 million and increased 8%.
Full Year 2022 Financial Highlights, as compared to Full Year 2021:
Total revenue was $457.8 million and increased 8%. Total Smartphone revenue of $353.2 million was flat, while CE, IoT/Auto revenue was $103.5 million and increased 51%.
Recurring revenue was $403.9 million and increased 15%. Smartphone recurring revenue was $351.1 million, and increased 11%, and CE, IoT/Auto recurring revenue was $51.7 million and increased 63%.
Operating expenses were $307.3 million and decreased 13%. The decrease was primarily driven by cost-savings actions the company initiated in 2021 and reduction of the related non-recurring costs.
Net income1 was $93.7 million and increased 69%.
Diluted earnings per share was $3.07 and increased 73%.
Adjusted EBITDA2 was $254.5 million and increased 22%.
Near-Term Outlook
The company expects recurring revenue for first quarter 2023 will be between $94 and $98 million. This range covers existing agreements and includes a conservative estimate that the company will recognize under its binding arbitration agreement with Samsung. It does not include the potential impact of any new agreements that may be signed during the balance of first quarter 2023.
The company expects first quarter 2023 operating expenses will be in the range of $75 to $79 million. In addition, the company expects non-operating expenses, comprised of interest expense and other income (expense), will be in the range of $1 to $3 million and the effective tax rate will be approximately 25%.
Conference Call Information
InterDigital will host a conference call on Wednesday, February 15, 2023 at 10:00 a.m. ET to discuss its fourth quarter and full year 2022 financial performance and other company matters.
For a live Internet webcast of the conference call, visit www.interdigital.com and click on the “Webcast” link on the Investors page. The company encourages participants to take advantage of the Internet option.
For telephone access to the conference call, visit www.interdigital.com and click on the “Dial In Registration” link on the Investors page. Registration is necessary to obtain a dial in phone number and PIN to join.
An Internet replay of the conference call will be available on InterDigital’s website under Events in the Investor’s section. The replay will be available for one year.
About InterDigital®
InterDigital develops mobile and video technologies that are at the core of devices, networks, and services worldwide. We solve many of the industry’s most critical and complex technical challenges, inventing solutions for more efficient broadband networks, better video delivery, and richer multimedia experiences years ahead of market deployment. InterDigital has licenses and strategic relationships with many of the world’s leading technology companies. Founded in 1972, InterDigital is listed on Nasdaq.
InterDigital is a registered trademark of InterDigital, Inc.
For more information, visit the InterDigital website: www.interdigital.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include information regarding our current beliefs, plans and expectations, including, without limitation, our belief that we will continue to be able to execute strongly on our business during the ongoing COVID-19 pandemic. Words such as “believe,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “forecast,” “goal,” “could,” "would," "should," "if," "may," "might," "future," "target," "trend," "seek to," "will continue," "predict," "likely," "in the event," and variations of any such words or similar expressions are intended to identify such forward-looking statements.
Forward-looking statements are made on the basis of management’s current views and assumptions and are not guarantees of future performance. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results, and actual events that occur, to differ materially from results contemplated by the forward-looking statements. These risks and uncertainties include, but are not limited to: (i) unanticipated delays, difficulties or accelerations in the execution of patent license agreements; (ii) our ability to leverage our strategic relationships and secure new patent license agreements on acceptable terms; (iii) our ability to enter into sales and/or licensing partnering arrangements for certain of our patent assets; (iv) our ability to enter into partnerships with leading inventors and research organizations and identify and acquire technology and patent portfolios that align with our roadmap; (v) our ability to commercialize our technologies and enter into customer agreements; (vi) the failure of the markets for our current or new technologies to materialize to the extent or at the rate that we expect; (vii) unexpected delays or difficulties related to the development of our technologies; (viii) changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the 2017 Tax Cuts and Jobs Act, as well as further guidance that may be issued regarding such act; (ix) risks related to the potential impact of new accounting standards on our financial position, results of operations or cash flows; (x) failure to accurately forecast the impact of our restructuring activities on our financial statements and our business; (xi) the resolution of current legal proceedings, including any awards or judgments relating to such proceedings, additional legal or regulatory proceedings, changes in the schedules or costs associated with legal proceedings or adverse rulings in such proceedings; (xii) the timing and impact of potential administrative and legislative matters; (xiii) changes or inaccuracies in market projections; (xiv) our ability to obtain liquidity though debt and equity financings; (xv) the potential effects that macroeconomic uncertainty could have on our financial position, results of operations and cash flows; (xvi) changes in our business strategy; (vii) changes or inaccuracies in our expectations with respect to royalty payments by our customers and (xviii) risks related to our assumptions and application of relevant accounting standards, including with respect to revenue being recognized under our binding arbitration agreement with Samsung.
We undertake no duty to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law.
Footnotes
1 Throughout this press release, net income and diluted earnings per share (“EPS”) are attributable to InterDigital, Inc. (e.g., after adjustments for non-controlling interests), unless otherwise stated.
2 Adjusted EBITDA is a supplemental non-GAAP financial measure that InterDigital believes provides investors with important insight into the company's ongoing business performance. InterDigital defines Adjusted EBITDA as net income attributable to InterDigital, Inc. plus net loss attributable to non-controlling interest, income tax (provision) benefit, other income (expense) & interest expense, depreciation and amortization, share-based compensation, and other items. Other items may include restructuring costs, impairment charges and other non-recurring items. InterDigital’s computation of Adjusted EBITDA might not be comparable to Adjusted EBITDA reported by other companies. The presentation of Adjusted EBITDA, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. A reconciliation of Adjusted EBITDA to net income attributable to InterDigital, Inc., the most directly comparable GAAP financial measure, is provided below.
3 Free cash flow is a supplemental non-GAAP financial measure that InterDigital believes is helpful in evaluating the company’s ability to invest in its business, make strategic acquisitions and fund share repurchases, among other things. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in the company’s cash balance for the period. InterDigital defines free cash flow as net cash used in operating activities less purchases of property and equipment and capitalized patent costs. InterDigital’s computation of free cash flow might not be comparable to free cash flow reported by other companies. The presentation of free cash flow, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. A reconciliation of free cash flow to net cash used in operating activities, the most directly comparable GAAP financial measure, is provided below.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
(unaudited)
For the Three Months
Ended December 31, For the Twelve Months
Ended December 31, 2022 2021 2022 2021 REVENUES: Recurring revenues: Smartphone$88,742 $91,397 $351,064 $315,098 CE, IoT/Auto 14,677 9,770 51,717 31,721 Other 197 414 1,107 4,881 Total recurring revenues 103,616 101,581 403,888 351,700 Non-recurring revenues 13,439 10,234 53,906 73,709 Total revenues$117,055 $111,815 $457,794 $425,409 OPERATING EXPENSES: Research and portfolio development 45,732 48,704 185,202 200,484 Licensing 20,170 15,712 71,419 64,625 General and administrative 12,559 14,223 47,377 61,217 Restructuring activities — 7,587 3,280 27,877 Total Operating expenses 78,461 86,226 307,278 354,203 Income from operations 38,594 25,589 150,516 71,206 INTEREST EXPENSE (10,050) (5,796) (29,496) (25,225)OTHER INCOME (EXPENSE), NET 11,652 9,349 (3,457) 11,575 Income before income taxes 40,196 29,142 117,563 57,556 INCOME TAX PROVISION (8,190) (9,329) (25,502) (15,368)NET INCOME$32,006 $19,813 $92,061 $42,188 Net loss attributable to noncontrolling interest (402) (2,065) (1,632) (13,107)NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC.$32,408 $21,878 $93,693 $55,295 NET INCOME PER COMMON SHARE — BASIC$1.09 $0.71 $3.11 $1.80 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC 29,664 30,682 30,106 30,764 NET INCOME PER COMMON SHARE — DILUTED$1.08 $0.70 $3.07 $1.77 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED 30,031 31,196 30,485 31,253 CASH DIVIDENDS DECLARED PER COMMON SHARE$0.35 $0.35 $1.40 $1.40
SUMMARY CONSOLIDATED CASH FLOWS
(in thousands)
(unaudited)
For the Three Months
Ended December 31, For the Twelve Months
Ended December 31, 2022 2021 2022 2021 Income before income taxes$40,196 $29,142 $117,563 $57,556 Taxes paid (2,220) (13,256) (6,805) (23,091)Non-cash expenses 27,333 24,103 117,646 119,375 Change in deferred revenue (60,931) (80,912) 85,403 (16,868)Change in operating working capital, deferred charges and other 352,130 112,152 (27,768) (6,580)Purchases of property and equipment and capitalized patent costs (11,614) (5,905) (42,753) (35,927)FREE CASH FLOW 3 344,894 65,324 243,286 94,465 Net proceeds from debt refinancing (307) — 138,886 — Dividends paid (10,382) (10,739) (42,306) (43,058)Repurchase of common stock — (7,000) (74,445) (30,000)Other 4,497 (2,203) (2,531) (3,674)NET INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS$338,702 $45,382 $262,890 $17,733
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
DECEMBER 31,
2022 DECEMBER 31,
2021ASSETS Cash, cash equivalents and short-term investments$1,201,777 $941,627Accounts receivable, net 53,182 31,113Prepaid and other current assets 89,716 77,545Property & equipment and patents, net 365,337 376,962Other long-term assets, net 190,093 200,909TOTAL ASSETS$1,900,105 $1,628,156LIABILITIES AND SHAREHOLDERS’ EQUITY Accounts payable, accrued liabilities, taxes payable & dividends payable$82,287 $79,888Current deferred revenue 189,059 291,673Long-term deferred revenue 237,580 19,463Long-term debt & other long-term liabilities 660,666 484,215TOTAL LIABILITIES 1,169,592 875,239TOTAL INTERDIGITAL, INC. SHAREHOLDERS' EQUITY 724,895 745,239Noncontrolling interest 5,618 7,678TOTAL EQUITY 730,513 752,917TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,900,105 $1,628,156
RECONCILIATION OF NON-GAAP MEASURES
The table below presents a reconciliation of Adjusted EBITDA to net income attributable to InterDigital, Inc., the most directly comparable GAAP financial measure (in thousands):
For the Three Months
Ended December 31, For the Twelve Months
Ended December 31, 2022 2021 2022 2021 Net income attributable to InterDigital, Inc.$32,408 $21,878 $93,693 $55,295 Net loss attributable to non-controlling interest (402) (2,065) (1,632) (13,107)Income tax provision 8,190 9,329 25,502 15,368 Other income (expense), net & interest expense (1,602) (3,553) 32,953 13,650 Depreciation and amortization 19,422 19,222 78,571 78,193 Share-based compensation 6,918 7,726 22,127 28,736 Other items(a) — 7,587 3,280 29,877 Adjusted EBITDA2$64,934 $60,124 $254,494 $208,012
(a) Other items in the above table includes $7.6 million of restructuring costs during the three months ended December 30, 2021 and restructuring costs of $3.3 million and $27.9 million during the twelve months ended December 30, 2022 and 2021, respectively. The twelve months ended December 30, 2021 also includes $2.0 million of additional non-recurring personnel-related costs expenses related to new employee agreements.
The table below presents a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measure (in thousands):
For the Three Months
Ended December 31, For the Twelve Months
Ended December 31, 2022 2021 2022 2021 Net cash provided by operating activities $356,508 $71,229 $286,039 $130,392 Purchases of property and equipment (2,284) (634) (3,156) (2,511)Capitalized patent costs (9,330) (5,271) (39,597) (33,416)Free cash flow3 $344,894 $65,324 $243,286 $94,465
CONTACT:InterDigital, Inc.: investor.relations@interdigital.com +1 (302) 300-1857
Interdigital Inc (Symbol: IDCC) saw options trading volume of 4,626 contracts, representing approximately 462,600 underlying shares or approximately 123.5% of IDCC's average daily trading volume over the past month, of p trailing twelve month trading history, with the $80 strike highlighted in orange:
https://www.nasdaq.com/articles/notable-monday-option-activity:-byd-idcc-atvi
Vanguard now owes 11.71% of IDCC. EOM
InterDigital wins third decision in 2023 from UK court in Lenovo dispute
Source: GlobeNewswire Inc.
InterDigital, Inc. (Nasdaq: IDCC), a mobile and video technology research and development company, today announced that a UK court has once again ruled in its favor in the company’s patent litigation with Lenovo. The Court of Appeal in London overturned the High Court's ruling on invalidity, finding that InterDigital's patent is valid and upheld the High Court's ruling that the patent is essential and infringed.
This is the third court victory for InterDigital in this dispute since the beginning of 2023. In January, the Court of Appeal upheld a lower court verdict that an InterDigital cellular patent is valid, essential and infringed and, in the third technical trial, the High Court ruled that Lenovo is infringing another InterDigital cellular patent, which was also deemed to be valid and essential. A decision is pending in a separate trial to determine fair, reasonable and non-discriminatory terms for a license to InterDigital’s portfolio.
“This latest UK court victory, our third in a matter of weeks, serves as further confirmation of the quality of our patented innovations,” commented Josh Schmidt, Chief Legal Officer, InterDigital. “Our portfolio of foundational cellular and video technologies has repeatedly been recognized as world class by third parties and is further validated by our long record of licensing many of the leading device manufacturers in the world.”
About InterDigital®
InterDigital develops mobile and video technologies that are at the core of devices, networks, and services worldwide. We solve many of the industry’s most critical and complex technical challenges, inventing solutions for more efficient broadband networks, better video delivery, and richer multimedia experiences years ahead of market deployment. InterDigital has licenses and strategic relationships with many of the world’s leading technology companies. Founded in 1972, InterDigital is listed on Nasdaq. InterDigital is a registered trademark of InterDigital, Inc.
For more information, visit: www.interdigital.com.
InterDigital Contact:
Richard Lloyd
Email: richard.lloyd@interdigital.com
+1 (202) 349-1716
Teecee56 - I suppose you are correct; I'm prone to over think things. However I'm still looking for either a patent sale or a license for a technology that would be a first for IDCC. The video patent portfolio has more potential than we have seen to date. JMHO
Jealmc79 - I'm still trying to figure this whole thing out also.
Time seems to be of the essence...'we will pay $69...No wait, make that $75...' why the rush? Change of share ownership = change of control.
Something is about to change that IDCC management deems will increase profitability.
The presentation on February 15th should be fun.
Monterey2000 - I believe that the convertible bond redemption is what has prompted the Dutch Auction. The company foresees a time in the near future when the window opens for the convertible bonds to convert. They are simply buying stock at a price that is less than the conversion price. JMHO
Rooster - If IDCC is close to signing a license that involves the video comprehension patent portfolio, it will represent a completely new revenue stream that has not been priced into our market value. JMHO
Teecee56 - Thanks for your reply. So the borrower of the shares has no control over the timing of the repayment of the shares. The lender of the shares can end the arrangement in their sole discretion.
The closing of the Dutch Auction on February 17th may require some mandatory overtime for multiple Margin Clerks around the country. JMHO
Question: Some institutional owners loan their shares (for a fee) to an entity that will sell the stock short. If the Institution that loans those shares decides that they want to participate in the Dutch Auction, what is the procedure for them to regain control of the loaned shares?
Thanks in advance.
Vegas Options - I suspect that you are referring to the following paragraph from this article:
"Average portfolio weight of all funds dedicated to US:IDCC is 0.1331%, a decrease of 18.2737%. Total shares owned by institutions decreased in the last three months by 1.27% to 28,152K shares."
I do not understand what the author is trying to convey with that statement.
From a different website [Webull] that I use often and believe to provide accurate information:
AS OF 1/25/2023
Institutions (25.8300M) 87.09%
Insiders (.4142M) 1.40%
Holding Co. (?) .01%
Other 11.50%
Total 100%
36,338 Shares in InterDigital, Inc. (NASDAQ:IDCC) Bought by Great West Life Assurance Co. Can
TUE., JANUARY 31, 2023
MARKETBEAT
Great West Life Assurance Co. Can bought a new position in shares of InterDigital, Inc. (NASDAQ:IDCC - Get Rating) in the 3rd quarter, according to its most recent disclosure with the Securities and Exchange Commission. The firm bought 36,338 shares of the Wireless communications provider's stock, valued at approximately $1,466,000. Great West Life Assurance Co. Can owned about 0.12% of InterDigital as of its most recent SEC filing.
Other large investors have also bought and sold shares of the company. CWM LLC raised its position in InterDigital by 62.0% during the 3rd quarter. CWM LLC now owns 619 shares of the Wireless communications provider's stock worth $25,000 after purchasing an additional 237 shares during the last quarter. US Bancorp DE grew its holdings in InterDigital by 34.8% during the 3rd quarter. US Bancorp DE now owns 1,216 shares of the Wireless communications provider's stock worth $50,000 after acquiring an additional 314 shares during the period. Lazard Asset Management LLC grew its holdings in InterDigital by 49.0% during the 2nd quarter. Lazard Asset Management LLC now owns 1,998 shares of the Wireless communications provider's stock worth $121,000 after acquiring an additional 657 shares during the period. Nisa Investment Advisors LLC grew its holdings in InterDigital by 17.9% during the 2nd quarter. Nisa Investment Advisors LLC now owns 2,106 shares of the Wireless communications provider's stock worth $128,000 after acquiring an additional 320 shares during the period. Finally, Point72 Hong Kong Ltd acquired a new stake in InterDigital during the 2nd quarter worth about $132,000. 83.97% of the stock is owned by institutional investors.
Analysts Set New Price Targets
A number of brokerages have weighed in on IDCC. TheStreet upgraded InterDigital from a "c+" rating to a "b" rating in a report on Monday, January 23rd. Jefferies Financial Group began coverage on InterDigital in a report on Friday, December 9th. They set a "buy" rating and a $80.00 price target for the company. StockNews.com began coverage on InterDigital in a report on Wednesday, October 12th. They set a "hold" rating for the company. Finally, William Blair initiated coverage on InterDigital in a report on Thursday, January 26th. They set an "outperform" rating for the company. One analyst has rated the stock with a sell rating, one has given a hold rating and two have given a buy rating to the company's stock. According to data from MarketBeat.com, InterDigital currently has a consensus rating of "Hold" and a consensus target price of $70.00.
InterDigital Stock Performance
Shares of IDCC opened at $69.03 on Tuesday. The company has a debt-to-equity ratio of 0.86, a current ratio of 4.66 and a quick ratio of 4.66. The stock has a 50-day moving average of $54.36 and a 200-day moving average of $52.14. The company has a market cap of $2.05 billion, a PE ratio of 25.47, a P/E/G ratio of 1.31 and a beta of 1.11. InterDigital, Inc. has a one year low of $40.23 and a one year high of $71.73.
InterDigital (NASDAQ:IDCC - Get Rating) last issued its earnings results on Thursday, November 3rd. The Wireless communications provider reported $0.74 EPS for the quarter, beating the consensus estimate of $0.44 by $0.30. The company had revenue of $114.76 million during the quarter, compared to the consensus estimate of $113.50 million. InterDigital had a return on equity of 11.47% and a net margin of 18.38%. On average, equities research analysts predict that InterDigital, Inc. will post 2.65 EPS for the current fiscal year.
InterDigital Announces Dividend
The business also recently declared a quarterly dividend, which was paid on Wednesday, January 25th. Shareholders of record on Wednesday, January 11th were paid a dividend of $0.35 per share. The ex-dividend date of this dividend was Tuesday, January 10th. This represents a $1.40 dividend on an annualized basis and a yield of 2.03%. InterDigital's dividend payout ratio (DPR) is currently 51.66%.
About InterDigital (Get Rating)
nterDigital, Inc engages in the design and development of technologies that enable and enhance wireless communications, and capabilities. It focuses on mobile technology and devices, which includes cellular wireless technology, Internet of Things, technology, video coding & transmission, sensor and sensor fusion technology.
https://www.marketbeat.com/instant-alerts/nasdaq-idcc-sec-filing-2023-01-31/
BlackRock Increases Position in InterDigital (IDCC)
February 01, 2023 — 03:17 pm EST
Written by Fintel Staff for Fintel -
Fintel reports that BlackRock has filed a 13G/A form with the SEC disclosing ownership of 5.12MM shares of InterDigital Inc (IDCC). This represents 17.3% of the company.
In their previous filing dated January 27, 2022 they reported 5.03MM shares and 16.40% of the company, an increase in shares of 1.77% and an increase in total ownership of 0.90% (calculated as current - previous percent ownership).
Analyst Price Forecast Suggests 21.76% Upside
As of January 29, 2023, the average one-year price target for InterDigital is $85.17. The forecasts range from a low of $50.50 to a high of $109.20. The average price target represents an increase of 21.76% from its latest reported closing price of $69.95.
The projected annual revenue for InterDigital is $434MM, a decrease of 3.99%. The projected annual EPS is $2.78, an increase of 1.41%.
Fund Sentiment
There are 542 funds or institutions reporting positions in InterDigital. This is a decrease of 28 owner(s) or 4.91%.
Average portfolio weight of all funds dedicated to US:IDCC is 0.1331%, a decrease of 18.2737%. Total shares owned by institutions decreased in the last three months by 1.27% to 28,152K shares.
What are large shareholders doing?
IJR - iShares Core S&P Small-Cap ETF holds 2,166,928 shares representing 7.30% ownership of the company. In it's prior filing, the firm reported owning 2,158,522 shares, representing an increase of 0.39%. The firm decreased its portfolio allocation in IDCC by 32.26% over the last quarter.
FIL holds 1,161,625 shares representing 3.92% ownership of the company. In it's prior filing, the firm reported owning 1,175,759 shares, representing a decrease of 1.22%. The firm decreased its portfolio allocation in IDCC by 29.02% over the last quarter.
VTSMX - Vanguard Total Stock Market Index Fund Investor Shares holds 854,979 shares representing 2.88% ownership of the company. In it's prior filing, the firm reported owning 909,494 shares, representing a decrease of 6.38%. The firm decreased its portfolio allocation in IDCC by 34.86% over the last quarter.
Disciplined Growth Investors holds 797,161 shares representing 2.69% ownership of the company. In it's prior filing, the firm reported owning 797,366 shares, representing a decrease of 0.03%. The firm decreased its portfolio allocation in IDCC by 31.39% over the last quarter.
NAESX - Vanguard Small-Cap Index Fund Investor Shares holds 753,060 shares representing 2.54% ownership of the company. In it's prior filing, the firm reported owning 776,672 shares, representing a decrease of 3.14%. The firm decreased its portfolio allocation in IDCC by 32.78% over the last quarter.
InterDigital Declares $0.35 Dividend
InterDigital said on December 2, 2022 that its board of directors declared a regular quarterly dividend of $0.35 per share ($1.40 annualized). Shareholders of record as of January 10, 2023 received the payment on January 25, 2023. Previously, the company paid $0.35 per share.
At the current share price of $69.95 / share, the stock's dividend yield is 2.00%. Looking back five years and taking a sample every week, the average dividend yield has been 2.23%, the lowest has been 1.64%, and the highest has been 4.04%. The standard deviation of yields is 0.38 (n=236).
The current dividend yield is 0.61 standard deviations below the historical average.
Additionally, the company's dividend payout ratio is 0.50. The payout ratio tells us how much of a company's income is paid out in dividends. A payout ratio of one (1.0) means 100% of the company's income is paid in a dividend. A payout ratio greater than one means the company is dipping into savings in order to maintain its dividend - not a healthy situation. Companies with few growth prospects are expected to pay out most of their income in dividends, which typically means a payout ratio between 0.5 and 1.0. Companies with good growth prospects are expected to retain some earnings in order to invest in those growth prospects, which translates to a payout ratio of zero to 0.5.
The company has not increased its dividend in the last three years.
Interdigital Background Information
(This description is provided by the company.)
InterDigital develops mobile and video technologies that are at the core of devices, networks, and services worldwide. The Company solves many of the industry's most critical and complex technical challenges, inventing solutions for more efficient broadband networks, better video delivery, and richer multimedia experiences years ahead of market deployment. InterDigital has licenses and strategic relationships with many of the world's leading technology companies. Founded in 1972, InterDigital is listed on NASDAQ and is included in the S&P MidCap 400® index.
This story originally appeared on Fintel.
https://www.nasdaq.com/articles/blackrock-increases-position-in-interdigital-idcc
IDCC may set a new 52 week high before the close today (currently $71.73).
InterDigital again named one of the world’s top 100 innovators
Source: GlobeNewswire Inc.
InterDigital, Inc. (Nasdaq: IDCC), a mobile and video technology research and development company, has been named one of the world’s leading innovative companies for a second consecutive year in a report from Lexis Nexis.
The report, Innovation Momentum 2023: The Global Top 100, includes companies that own some of the world’s leading patent portfolios that possess what Lexis Nexis terms the “highest innovation momentum,” based on the company’s proprietary analytics. As part of its analysis, the report assesses companies’ patent portfolios not only on their impact on the innovation landscape today but also on their likely impact in the long term.
“Our inclusion in this report for a second consecutive year is another strong endorsement of our foundational innovation and the quality of our patent portfolio,” said Liren Chen, CEO and President, InterDigital. “InterDigital’s inventors are among the world’s best in developing technologies such as 5G and advanced video compression that underpin so much of the connected world around us, and which will help define next generation connected ecosystems for years to come.”
To learn more about the Top 100 and to download the “Innovation Momentum 2023: The Global Top 100” intellectual property report, visit www.lexisnexisip.com/innovation-report-2023.
About InterDigital®
InterDigital develops mobile and video technologies that are at the core of devices, networks, and services worldwide. We solve many of the industry’s most critical and complex technical challenges, inventing solutions for more efficient broadband networks, better video delivery, and richer multimedia experiences years ahead of market deployment. InterDigital has licenses and strategic relationships with many of the world’s leading technology companies. Founded in 1972, InterDigital is listed on NASDAQ. InterDigital is a registered trademark of InterDigital, Inc.
For more information, visit: www.interdigital.com.
InterDigital Contact:
Richard Lloyd
Email: richard.lloyd@interdigital.com
+1 (202) 349-1716
Paullee - As always, thank you for posting the litigation updates.
Update: Short interest as of 1/13/23 was 2.18m shares.
William Blair began coverage after the announcement of the Dutch Auction so I imagine that they didn't expect to buy any IDCC stock below $69. JMHO
Short interest as of 12/31/22 was 1.88m shares. I can't envision any of them remaining after the auction is completed.
William Blair initiated research coverage of InterDigital, Inc. (IDCC $68.21), a research-and-development company that designs and develops wireless, visual, and other related technologies that enable connectivity and enhance immersive experiences across various communications and entertainment products.
Analyst Alessandra Vecchi stated that the company could increase annualized recurring revenue from roughly $400 million as of the third quarter of 2022 to $650 million over the next three to five years.
“InterDigital is a leading research-and-development company boasting a strong portfolio of roughly 28,000 patents related to wireless communications and video technologies, which it licenses to global wireless and consumer electronics manufacturers,” said Vecchi. “The company has a strong track record for retention, having licensed some customers for over 20 years and Samsung and Apple since before their first flagship phones shipped.
“InterDigital’s wireless innovations span the earliest digital cellular systems to the latest 5G solutions, and its portfolio includes numerous patents/patent applications that it believes are, may be, or may become essential to standards established by Standards Development Organizations (SDOs), including 3G, 4G, IEEE 802, and patents/patent applications that are or may become essential to current and future 5G standards,” added Vecchi. “The company’s strong recurring revenue, which is 88% of 2022 revenue, combined with its recent licensing momentum within wireless and its building momentum within consumer electronics, IoT, and auto give us confidence that InterDigital can continue to convert wireless OEMs into licensees and monetize its portfolio of video patents.”
William Blair is the premier global boutique with expertise in investment banking, investment management, and private wealth management. We provide advisory services, strategies, and solutions to meet our clients’ evolving needs. As an independent and employee-owned firm, together with our strategic partners, we operate in more than 20 offices worldwide.*
InterDigital : How InterDigital's Video Solutions Are Encouraging Greater Energy-Awareness
01/23/2023 | 07:00pm EST
Alongside incredible entertainment potential and enabling new, enhanced forms of communication, the video streaming industry consumes a lot of energy. Video traffic now accounts for roughly 80 percent of all data transmitted over the internet, and Netflix alone streams around 250 million hours of video each day. With roughly 5 billion global internet users and more than 28 billion connected devices demanding faster than ever broadband speeds to satiate our desire for streaming media, the engineers and inventors at InterDigital are creating solutions and shaping standards to mitigate streaming video's energy impact.
With an annual carbon footprint now exceeding that of the airline industry, the video industry must soon acknowledge and reckon with its growing sustainability challenges. Thankfully, we at InterDigital lead and contribute to several initiatives that help address these concerns, while continuing to encourage innovation in critical solutions. Here, we'll explore three areas that shape our impact, including energy-aware technologies, video codecs, and standards.
Energy Aware Technologies
The International Energy Agency's analysis of energy use in video streaming consumption found that consumer devices account for a whopping 72 percent of energy consumption, followed by data transmission at 23 percent and data centers the remaining 5 percent. An important caveat to consider is that user devices only consume this much energy when they are turned on, while infrastructure components are typically operational and using energy all day and all year long. Still, these three components of the video streaming chain have unique opportunities to reduce energy consumption.
As devices and displays trend toward more energy-hungry 4K and 8K resolutions as well as high dynamic range (HDR) technologies, energy aware solutions will become more critical. For example, cutting-edge energy-aware display technology can intelligently reduce the pixel brightness of displayed images to optimize the balance between energy consumption and perceptible image quality.
When you consider that there are millions of pixels within each display screen, and more than a billion televisions installed worldwide, even small reductions in pixel brightness across televisions can achieve major energy savings. In fact, InterDigital has pioneered important innovations in Pixel Value Reduction (PVR) solutions that reduce the brightness of an image while maintaining or controlling the perceived quality to the viewer.
InterDigital's research in PVR solutions explores two main approaches. The first approach focuses on overall quality of experience and manages the "Just Noticeable Difference" between an original and a processed image, with the goal of maintaining the best image quality while capturing whatever energy savings possible. The process is transparent for end users, and effectively guarantees no change in perceived quality of experience. The solution targets a viewer's perceived experience and is more appropriate for broadcast content where artistic integrity might take priority over visible modifications to the content.
The second approach is focused on achieving specific energy reduction targets and is thus more applicable to streaming content that is typically adapted to support unique users with different levels of content at varying qualities. This type of approach can result in the user perceiving a difference in the quality of experience, but it also enables the user to customize and maximize energy reduction in their devices. This approach can take advantage of machine learning methods to help achieve the best tradeoff between image quality and energy savings.
With these solutions, the difference in quality of experience between an original image and a PVR-processed image would be minimal, if not imperceptible, though the energy savings they enable are real.
New Codecs - VVC
New video compression codecs, such as Versatile Video Coding, or VVC, are capable of an approximately 40 percent reduction in bitrate with no perceptible sacrifice in image quality. While it's challenging to quantify exactly what that means in terms of energy savings generally - because there are so many variables that make up any given bitstream - it is believed that large reductions in bitrates generally equate to significant energy savings in the coding and transmission components of the video chain. Encoding in particular is a compute-intensive process that requires a lot of energy, and lower-bandwidth video requires less energy to transmit, so the efficiency of new codecs like VVC represent a good step forward in energy savings.
As a hybrid video codec based on HEVC, VVC leverages its commonalities with its predecessor to help it run more efficiently across a wider range of hardware. It refines these existing coding technologies while adding new coding tools, making it more adaptable to many different types of content, from HDR to 360-degree video and even computer-generated content.
Because of its approach and efficiency - which helps to reduce overall video traffic and network congestion - VVC is an excellent codec choice for video over 5G networks, streaming (including UHD) and television broadcast. There are certainly other forms of video content being developed and transmitted over various networks, but if we look at the three biggest types of consumer video services alone - mobile video, streaming, and broadcast to TV sets - VVC is the most efficient codec available today. Nowhere is that efficiency more important today than in mobile video.
You can learn more about VVC in our recent eBook.
Standards
Alongside these solutions and codecs, several global standards bodies, including ITU-R, MPEG, DVB, and SMPTE, are beginning to acknowledge and explore energy efficiency and sustainability initiatives around foundational and essential technologies we use daily.
In ITU-R, InterDigital has fought to raise awareness of these issues, and spearheaded a now-adopted effort to integrate the consideration of energy consumption into the standards purview. In addition to driving attention to the importance of these considerations across the video telecom ecosystem, InterDigital also leads in the exploration of Energy Aware Broadcasting Systems to encourage the adoption of energy efficiency schemes in broadcasting, and other efforts around carbon offsetting.
In addition, InterDigital maintains leadership roles within the Green MPEG working group and co-chairs the MPEG ad-hoc group on the carriage of green metadata. We are an active contributor to the extension of the VVC green metadata specification. InterDigital also co-leads the Digital Video Broadcasting (DVB)'s mission study on Energy Aware Service Delivery and Consumption to determine emerging opportunities to make sustainability-driven changes in the standard. Finally, InterDigital contributes to the SMPTE working group on Cloud and Sustainability.
At InterDigital, our innovation leadership in, and contributions to, energy-aware technologies, video codecs, and standards helps bring us closer to impactful, and more sustainable, connected ecosystems and immersive experiences.
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InterDigital Inc. published this content on 23 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 January 2023 23:59:19 UTC.
Question: Since the announcement of the Dutch Auction, I assume that IDCC is permitted to continue buying in the open market but does the daily maximum still apply regarding the 25% of daily volume?
vegas options - Thank you for your responses, much appreciated. EOM
Vegas options - I may have misunderstood IDCC's fourth quarter statement regarding three new licenses. Apple is one and Panasonic and LG are probably the other two. I am probably (wishful thinking) that Panasonic and LG renewal licenses are 2023 contracts rather than fourth quarter 2022. Sorry to be adding to the confusion but that is something I tend to do.
Monterey2000 - No effect regarding dilution. It just reduces the cost of meeting the future obligation to our bond holders at conversion. MO
vegas options - I stand corrected, you are right. The number of shares to be bought is closer to 5 million shares. I also note that the auction ends on February 17th which is also an option expiration date and just 2 days after a conference call on February 15th concerning the fourth quarter / year ending 2022 financials.
* Do you have any option advice for next month?
* Do you have any hunches as to who are the two companies besides Apple that licensed with IDCC during the fourth quarter?
scooby5 - This shouldn't act as a price cap at $69 for the shorts. IMO
Your post:
"Doesn't this auction effectively cap the price at $69.00 until it is over?"
Teecee56 - You may recall that December 16th was triple witch option expiration date and on that date IDCC stock traded 1,180,700 shares. I believe that the company bought over 250,000 of that volume using the remaining cash in the stock buyback authorization before adding the $333m to the authorized amount effective January 2023. This is also effecting the updated financials released January 19th which projects net income of $.93 per diluted share. JMHO
Short interest as of 12/31/22 was 1.88m shares. I can't envision any of them remaining after the auction is completed. This amount of shares should be sufficient to accommodate two-thirds of the auction offer.
Shorts may consider a new position at a considerably higher price.
IDCC's most recent press release regarding the earnings update, references three new licenses during the fourth quarter of 2022. Apple is one new license. I am very interested in learning the identity of the other two new licenses.
Teecee56 - regarding "pretty sophisticated stuff:
Eric Cohen:
PositionExecutive VP
Tenure4.75yrs
Age64
Compensation (per year)US$1.48m
Company Ownership0.15 %$ 2.8m 44.2k shares
Profile
Mr. Eric Cohen serves as Executive Vice President, Chief Strategy and Growth Officer at InterDigital, Inc. since 2021 and also served as Chief Development Officer of InterDigital, Inc. since April 23, 2018 until 2021. In his new role at InterDigital, Mr. Cohen leads a combined business strategy and corporate development organization. In addition to leading acquisitions, strategic investments and the strategic growth roadmap for InterDigital, Mr. Cohen will also work to identify and develop industry relationships that will enable the company to continue to lead in existing technologies and to expand into new areas within the mobile ecosystem. He served as the Senior Vice President of Corporate Development at Dolby Laboratories Inc. since May 2008 until September 2015. Mr. Cohen oversees corporate development, mergers and acquisitions activities and corporate strategy. He joined Cowen and Company, LLC in 1998 and served as its Managing Director and Head of Digital Media, Internet and New Media Business. He worked for 30 years in investment banking, where he gained diverse experience advising clients in strategic transactions and financings across a broad range of industries. He founded digital media practice at Cowen and Company, LLC since 2001 and served as its Senior Member of the Technology Investment Banking Team. Prior to joining Cowen, Mr. Cohen served as a Managing Director of Volpe Brown Whelan & Co., where he specialized in financing emerging growth companies in the health care and high technology industries. He served as a Managing Director at J.P. Morgan, where he helped to found the West Coast Investment Banking practice. Prior to joining J.P. Morgan, he served as a Director in High Yield Investment Banking for Credit Suisse First Boston in New York, where he was responsible for both financial sponsor coverage and origination of high yield transactions. He served as the Chairman of Board of Directors of Via Licensing Corporation. He has been a Director of DTS Inc. since July 1, 2016. He had been a Non-Executive Director at 7Digital Group PLC since June 09, 2014 until June 26, 2019 and served as its Senior Independent Non-Executive Director until June 26, 2019. Mr. Cohen holds an M.B.A. from Stanford University and a BS degree from Brown University.
Benefits of 5G at the Edge
JANUARY 10, 2023 / POSTED BY: ROBERT GAZDA, SENIOR DIRECTOR AT INTERDIGITAL
In a relatively short time, edge computing has progressed from a novel idea to commercial reality, with great potential to transform 5G into a vastly more powerful technology. As 5G matures, it’s important to explore edge computing and the potential it can unlock for connected ecosystems.
For 50 years, InterDigital has been a consistent contributor throughout each generation of wireless evolution, and today, we are engaged in ETSI Multi-Access Edge Computing (MEC) and in the 3GPP edge standardization process, for example helping to introduce an edge enablement service layer within Releases 17 and 18.
Edge computing is a critical technology that will both supplement 5G capabilities and complement 5G networks. As we examine the applications and use cases enabled by the edge, three key benefits come into clearer focus.
Benefit 1: Low Latency
The most apparent benefit of edge computing is its ultra-low latency as critical network and device processes take place much closer to the user at the network edge. Today, network operators and hyperscalers are embedding computing and storage resources at the network edge, and will soon offer additional capabilities including GPUs, AI resources, and other advanced services.
The low latency benefits could have varied impacts for different applications, all dependent upon where the network edge is located (whether on-premises, cell-site, network aggregation point, or central office, etc.), what applications are being prioritized, or what tier of edge computing to allocate to each use case.
For example, when considering the location of the edge for optimal ultra-low latency benefits versus cost or capacity, the needs for XR immersive gaming applications may differ from industrial machine-control applications. In XR gaming, video rendering is a critical function that is computing heavy and can be realized at the edge to enable new devices, such as lightweight XR glasses. XR rendering demands end-to-end latency in the order of 10-20 milliseconds. In contrast, industrial edge machine control applications will require end-to-end latency of less than 10 milliseconds. End-to-end latency includes network delay and application compute processing. These more complex applications, like the industrial example, will require edge compute capabilities to be deployed on-premises and even on mobile devices to work well. Other use cases can allow over 20 milliseconds of latency and can thus leverage a hybrid edge deployment or even a public network slice.
A tangible takeaway on the latency benefits provided by edge computing is that it eliminates the need for a one-size-fits-all approach to network provisioning for different use cases. As we hone the technology and customize the infrastructure to provision different edge computing designs for different cases, each edge deployment can leverage the aspects that best suit its specific needs.
Benefit 2: Local Processing
Local processing, or the ability to process huge volumes of data nearby the device instead of within a cloud resource, is a hugely beneficial edge computing model.
For example, an industrial IoT application may require a significant amount of sensing, largely through high-volume-producing sensors like video or LiDAR. Whether it’s a video sensor on a production line looking for manufacturing defects or a LiDAR sensor that uses AI processing, the addition of each sensor adds huge amounts of data and it may very quickly become impractical (and expensive!) to send all the data to a cloud server.
Local processing provides a practical solution to address this massive demand and ensures network operators don’t have to transmit large swaths of data over long distances -- both delivering obvious security benefits and improvements to overall system efficiency and cost.
Benefit 3: Proximity
In an edge context, proximity refers less to the closeness to the network edge for latency or efficiency purposes, and instead is more regulatory and data sovereignty focused.
As an example, the U.S. has recently experienced a proliferation in online gambling, with a growing number of virtual users and a patchwork of vastly different state and local regulations governing the online activity. In this instance, the data and computing of those operating the gambling may be required to be physically located in a specific state to comply with local regulations. Similarly, in the EU, the GDPR requires storage of personal data to remain in the EU. In some use cases, like healthcare, privacy and security requirements extend further and necessitate local on-premises edge processing and data storage.
Edge Intelligence, the intersection of Edge Computing and AI, is especially useful in the context of proximity. Private and sensitive data is stored and maintained at the edge, perhaps in a hospital. Edge Intelligence models execute localized training and inference on the private edge data, keeping it anonymized, while exchanging derived knowledge with the cloud.
The Edge and 5G: Points of Intersection
To better predict how 5G and edge computing will collaborate and entwine in the future, it’s important to explore how application developers are leveraging the edge computing ecosystem today.
In fact, the most significant level of traction is happening inside private 5G networks, often deployed in enterprise settings for a specific application or vertical. 5G private networks are often seen as "silos" because they aren’t interconnected in the same way as public networks. Due to localization in enterprises, they may hold the greatest potential for edge computing in the nearer term.
Another emerging example can be found in the ways edge computing is leveraging public telecom networks. A prominent example of this is AWS Wavelength, which places Amazon’s compute, storage, and developer services within 5G networks. In partnership with Verizon, the Wavelength platform allows application developers to use Verizon’s 5G network to deploy low-latency edge applications. Though AWS Wavelength service is available in limited locations, this is an exciting development for industry.
As industry progresses toward 5G Advanced and 6G, the fabric of edge computing will become more intertwined and closely knit with communications technology.
A critical opportunity remains in encouraging application developers to imagine and implement the use cases that will make edge networks most valuable. InterDigital is proud to have been awarded contracts to help the European Telecommunications Standards Institute (ETSI) develop, launch, and maintain the ETSI MEC Sandbox to help app developers interact with edge computing APIs and experiment with edge-native applications. As an example, application developer teams utilized the MEC Sandbox to compete in the ETSI & LINUX Foundation Edge Hackathon - 2022 hosted at the Edge Computing World Conference in Silicon Valley. This environment is driven by InterDigital's open-sourced mobile edge emulator, AdvantEDGE.
Over time, the edge ecosystem will continue to grow into a large, multi-domain ecosystem with many platforms, providers, and operators contributing solutions to specific and local network needs. As we approach this future, InterDigital remains engaged with industry partners, academia, and standards bodies to achieve the greatest potential for the edge under 5G and in the future 6G
InterDigital : As demand for high-definition streaming media grows, InterDigital's Erik Reinhard details innovative solutions for a more sustainable future
Today at 07:14 pm
INTERDIGITAL, INC.
58.58 USD +0.83%
In addition to being a Distinguished Scientist and impactful inventor of video and HDR solutions, InterDigital's Erik Reinhard is passionate about the sustainability of the foundational technologies we develop, and is driving critical efforts to incorporate greater energy awareness across video standards bodies. In his latest article in TV Tech, Erik outlines how certain technological advances are helping to make sustainability within the broadcast industry and production media more achievable. Read his full article Minimizing the Environmental Impact of Broadcast and Streaming Technology, here. Attachments Original Link Original Document Permalink Disclaimer InterDigital Inc. published this content on 06 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 January 2023 18:12:45 UTC. ...
Could it be that Samsung wants the resolution of the Motorola rate setting exercise to be completed before agreeing to a royalty rate with InterDigital?
InterDigital : Reflections on a year of patent policy
InterDigital Inc. published this content on 29 December 2022
Today at 02:24 pm
INTERDIGITAL, INC.
If there's one big takeaway from patent policy in recent years, it's the extent to which standard essential patents (SEPs) are increasingly shaping the IP and, in some cases, the wider tech policy agenda in the U.S., Europe and Asia. That's not surprising given the importance of standardized technologies such as 5G, but it does also mean that policymakers need to tread extremely carefully to protect the balance between innovators and those who implement these technologies in their devices.
We began 2022 knowing that the patent policy landscape was going to change and leading the way was the move by the U.S. Patent and Trademark Office (USPTO), the Department of Justice's Antitrust Division and the National Institute of Standards and Technology (NIST) to withdraw a 2019 policy statement on SEP FRAND remedies. They also announced that a new draft policy statement would not be implemented and that the U.S. Government would review the conduct of SEP owners and implementer companies on a case-by-case basis.
This was a welcome development, not least because commercial disputes are best settled by the parties themselves or through some form of dispute resolution if the parties can't agree - not through government policymaking.
We're still waiting to see how that case-by-case approach might work in practice, but another encouraging development in the U.S. was USPTO Director Kathi Vidal's strong endorsement of increasing participation in global standards by U.S. headquartered companies. The development of 5G shows that this is badly needed since there are just two U.S. headquartered innovators - InterDigital and Qualcomm - among the leading developers of the 5G standard.
In a blog post in September, PTO Director Vidal wrote, "We must continue to encourage U.S. participation in standard-setting organizations and the efficient and effective adoption of those technologies by our industries, as part of our efforts to promote innovation in the standards space and drive sustainable, long-term growth in the U.S. economy."
I welcome the link between participation in standardized technologies and long-term economic growth, but I would argue more still needs to be done to explain how more robust patent rights provide the best incentives to innovators in areas such as 5G.
More also needs to be done to ensure that Chinese implementer companies do not holdout on taking a license to innovators' patent portfolios. This year I have been encouraged by moves by the European Commission to take action against the aggressive use of anti-suit injunctions (ASI) by some OEMs in the smartphone space, including several from China.
The Commission is pursuing a case at the WTO to investigate the issuance of these ASIs which are designed to prevent parallel cases in an SEP licensing dispute from being heard by courts in the U.S. and Europe. ASIs are not a new legal tactic, but their most recent incarnation represents an aggressive form of over-reach which the Commission is right to target.
While Europe's lead on ASIs is welcome, I have been alarmed by the direction that the EU appears to be taking in other areas in relation to SEPs. After a public consultation earlier this year on various matters related to SEPs, the rumors out of Brussels are that policymakers are considering asking innovators to conduct overly burdensome essentiality checks on the SEPs in their portfolios. This would add an incredible amount of time and money to companies and research organizations who are already often out-gunned financially by implementer companies and would potentially give those holding-out on taking a license yet another means of delaying in paying up for the technology they use.
If the Commission is set on this course, then I want to be very clear that it cannot only be the innovators who have to take on this burden and any essentiality checking system cannot be open to abuse by implementer companies. Additionally, if the Commission pursues this policy, safeguards must be put in place to guard against patent holdout by implementer companies. European courts have led the way recently in highlighting the problem of holdout while the continent's innovators have played a central role for decades in advancing connectivity. The EU must not now shoot itself in the foot over poorly designed policy.
Keeping a very close eye on the direction that Europe takes on SEPs is at the top of my priority list in 2023 as standardized technologies are only becoming more valuable as we see more and more sophisticated levels of connectivity implemented across a growing number of industries. The stakes are once again high as policymakers ring in the new year.
Now, if I had one wish for 2023 (apart from the Washington Capitals winning another Stanley Cup), it would be that those in power recognize the immense value of strong patent rights and how strong patent rights incentivize and enable innovators to build on the technologies that have come before them. The kind of foundational research that engineers at InterDigital and elsewhere engage in is painstaking work and takes years to pay off. Appropriate protection for our innovation provides us with some guarantee that we can continue to invest in our engineers and help drive a new era in connectivity.
That's worth remembering no matter where you sit on the political spectrum.
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InterDigital Inc. published this content on 29 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 December 2022 13:23:07 UTC.
Trinityz1 - I know that I'm in the presents of greatness when when someone can correctly quote the Red Green show. Looking forward to a better 2023.
Vegas - Thanks, I don't follow the options trading like I used to before I retired. Merry Christmas.
Teecee56 - Sorry I don't know about the open options positions last Friday. Merry Christmas.