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dsteeler: The report does not mention IDCC. It covers six other companies.
https://www.uspto.gov/sites/default/files/documents/USPTO-5G-PatentActivityReport-Feb2022.pdf
"Key Takeaways
Unique among studies on 5G patenting
activity, this report examines both (1) overall
global 5G patenting trends, and (2) patent
filings and value indicators in the four most-
patented 5G-related technologies.
• Based on the report’s analysis of patenting
activity, the six most active 5G companies are
Ericsson, Huawei, LG, Nokia, Qualcomm, and
Samsung.
• The findings of the report call into question
claims that any single firm or country is
“winning” the 5G technology race."
vegas: I have no idea whether the reported block trade you referred to was for a company’s stock repurchase, or, was a block trade for an institution.
If it was for a stock repurchase To come within the safe harbor the purchases must satisfy the Rule's manner, timing, price, and volume conditions. Failure to meet any one of the four conditions will disqualify the issuer's purchases from the safe harbor for the day. I am sure that the firm that handles IDCC’s stock repurchases is well aware of how to meet the safe harbor requirements.
Since the trade apparently was a block trade transaction, the reporting requirements can be complicated. Except for a general NYSE rule that trades be reported promptly, I don’t know what the specific detailed rules are.
Vegas: Although I no longer have any IDCC stock, I still like to follow the board postings.
I doubt it was the company doing a stock buyback durng the last ten minutes of that trading day. In order to avoid a potential insider trading charge SEC 10b-18 has 4 rules that a company is required to follow when repuchasing stock. Following the rules gives a company a so called “safe harbor” against any charges. One of the rules is that an IDCC sized company is restricted from trading during the last 10 minutes of the trading day.
“(2) Time of purchases. Rule 10b-18 purchases must not be:
(i) The opening (regular way) purchase reported in the consolidated system;
(ii) Effected during the 10 minutes before the scheduled close of the primary trading session in the principal market for the security, and the 10 minutes before the scheduled close of the primary trading session in the market where the purchase is effected, for a security that has an ADTV value of $1 million or more and a public float value of $150 million or more;”
https://www.law.cornell.edu/cfr/text/17/240.10b-18
Currently there is a revised rule change under considertion that would require a company to give more information about stock repurchases.
https://www.journalofaccountancy.com/news/2021/dec/sec-addresses-share-buyback-disclosures-insider-trading-rules.html
An interesting article regarding 5G patent holders
https://www.iam-media.com/who-leads-the-5g-patent-race-2021-draws-the-end
Gamco: LG is not really a player in the mobile phone business, and it has been a consistent money loser for them. 6G when it becomes fully operational will present many different usage options, that apparently is what LG is looking at.
https://searchnetworking.techtarget.com/definition/6G
Monterey: IDCC has not been consistent in their 1st qtr dividend declaration date. It has varied from March 2 in 2011 to March 30 in 2016, Last year it was March 12.
https://www.nasdaq.com/market-activity/stocks/idcc/dividend-history
vegas: What used to be called a per unit license, with royalties due IDCC reported after the end of the quarter, is now called a variable agreement. Under their old accounting system this would result in royalties from these licenses being a quarter in "arrears". Under current accounting procedures IDCC now estimates the royalties due and includes them in the current quarter's report.
Again from the 10-K:
"Variable Agreements
Upon entering a new variable patent license agreement, the licensee typically agrees to pay royalties or license fees on licensed products sold during the term of the agreement. We utilize the sales- or usage- based royalty exception for these agreements and recognize revenues during the contract term when the underlying sale or usage occurs. Our licensees under variable agreements provide us with quarterly royalty reports that summarize their sales of covered products and their related royalty obligations to us. We typically receive these royalty reports subsequent to the period in which our licensees’ underlying sales occurred. As a result, we are required to estimate revenues, subject to the constraint on our ability to estimate such amounts."
note: It is the annual report 10-K, not the quarterly 10-Q, that has all their details concerning accounting policy and procedures.
Vegas: The following are some statement from the 10-K that explains how the term “recurring revenue” is used. It is not the simple dictionary definition and interpretation that you are using. As noted “recurring” revenue consists of royalty payments from per unit licencees based on current sales, and revenues from Dynamic Fixed Fee agreements, On the othe hand Non-recurring revenue primarily consists of past sales royalties and amounts computed under Static Fixed Fee agreements.
from the 10-K
“The following discussion should be read in conjunction with the Selected Financial Data, the Consolidated Financial Statements and the Notes thereto contained in this Form 10-K.
Throughout the following discussion and elsewhere in this Form 10-K, we refer to “recurring revenues” and “non-current patent royalties.” For all periods presented, recurring revenues are comprised of “current patent royalties” and “current technology solutions revenue,” while "non-current patent royalties" are comprised of past sales royalties and static fixed-fee agreement royalties.”
————-
As described, recurring revenues are comprised of current patent royalties, inclusive of Dynamic Fixed-Fee Agreement royalties, and current technology solutions revenue.
(b) Non-recurring revenues are comprised of non-current patent royalties, which primarily include past patent royalties and royalties from static agreements, as well as patent sales.
Determining whether a fixed fee license is Dynamic or Static is a little complicated,
Again from the 10-K:
“Dynamic fixed-fee license agreements contain a single performance obligation that represents ongoing access to a portfolio of technology over the license term, since our promise to transfer to the licensee access to the portfolio as it exists at inception of the license, along with promises to provide any technology updates to the portfolio during the term, are not separately identifiable. Upon entering a new agreement, we allocate the transaction price to the performance obligations delivered at signing (e.g. our existing patent portfolio) and future performance obligations (e.g. the technology updates). We use a time-based input method of progress to determine the timing of revenue recognition, and as such we recognize the future deliverables on a straight-line basis over the term of the agreement. We utilize the straight-line method as we believe that it best depicts efforts expended to develop and transfer updates to the customer evenly throughout the term of the agreement.
Static fixed-fee license agreements are fixed-price contracts that generally do not include updates to technology we create after the inception of the license agreement or in which the customer does not stand to substantively benefit from those updates during the term. Although we have few static fixed-fee license agreements, we generally satisfy our performance obligations under such agreements at contract signing, and as such revenue is recognized at that time.”
FISH: You are incorrect as far as IDCC's investment in Hillcrest. While IDCC may not have realized all the benefits they anticipated, they actually made a profit on the sale. According to the latest 10-K:
"Hillcrest Product Business
On December 20, 2016, we acquired Hillcrest Laboratories, Inc. ("Hillcrest"), a pioneer in sensor processing technology, for approximately $48.0 million in cash, net of $0.4 million cash acquired. The business combination transaction was accounted for using the acquisition method of accounting.
On July 19, 2019, we completed the sale of Hillcrest's product business to a subsidiary of CEVA, Inc. In connection with the sale, we received initial proceeds of $10.0 million, with a customary portion of the purchase price placed in escrow to secure potential indemnification claims. As part of the transaction, we retained substantially all of the Hillcrest patent assets that we acquired in 2016. As a result of this transaction, we recorded an $8.5 million gain on sale which is included within "Other Income, Net" in the consolidated statements of income for the year ended December 31, 2019."
As far as other investments, again according to the 10-K:
"The carrying value of our investments in other entities are included within "Other Non-Current Assets" on our consolidated balance sheets. During 2020, 2019 and 2018, we made investments in other entities of $0.2 million, $0.4 million and $6.7 million, respectively. The carrying value of our investments in other entities as of December 31, 2020 and 2019 was $15.5 million and $14.2 million, respectively, the majority of which are accounted for under the measurement alternative for equity investments described above."
If you go back in history, IDCC in 2013 wrote off their $21.7 million investment in Pantech; while in 2011/2012 they wrote off their $5.7 million investment in Kineto Wireless, andd their $0.7 million investment in Attila Technologies.
squingeqbob: You have a good memory, but it was an old post not a recent one. It was Loop's post #413300, 11/21/16, But it was more general about opportunities, not a sale.Here is the opening statement:
"The stars are lining up for IDCC, but the timing is still an issue. We will have numerous licenses for 5g because we are in a pot with major companies who have multiple licensees. Our cut is unknown, but the magnitude of the chips necessary to produce standards compliant terminals is astonishing. Cars, appliances, surgeries etc will be terminals under the wireless system."
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=126706103&txt2find=stars
jealmc79: You are referring to IDCC's Signal Trust for Wireless Innovation. According to this year's 10-K, the Trust apparently signed some licenses in 2018.
From the 10-K
"In 2013, InterDigital formed the Signal Trust for Wireless Innovation (the "Signal Trust"). The goal of the Signal Trust is to monetize a large patent portfolio related to cellular infrastructure. More than 500 patents and patent applications were transferred from InterDigital to the Signal Trust, focusing primarily on 3G and LTE technologies and developed by InterDigital's engineers and researchers over more than a decade. A number of these innovations have been contributed to the worldwide standards process, resulting in a portfolio that includes patents for pioneering inventions that we believe are used pervasively in the cellular wireless industry. InterDigital is the primary beneficiary of the Signal Trust. The distributions from the Signal Trust will support continued research related to cellular wireless technologies. A small portion of the proceeds from the Signal Trust are used to fund, through the Signal Foundation for Wireless Innovation, scholarly analysis of intellectual property rights and the technological, commercial and creative innovations they facilitate."
-----------
"(b) In 2018, we recognized $26.3 million of non-current patent royalties primarily attributable to the Kyocera and Signal Trust for Wireless Innovation patent license agreements, both signed in first quarter 2018."
vegas options: the most recent 13G filing by Blackrock Inc. reported a 12.2% holding of IDCC. Although the stock is owned by various Blackrock Funds,not the individual fund holders, Blackrock Inc. is listed as the beneficial owner and has sole voting and dispositive powers
https://www.sec.gov/Archives/edgar/data/1364742/000083423720008659/us45867g1013_020720.txt
vegas options: I think investors have gotten tired of hearing IDCC"s projections of $500 million in revenue resulting in large increases in profits. Below is an old post of mine from 2016 related to the subject,
olddog967 Tuesday, 05/10/16 04:40:04 PM
Re: dws post# 408428 0
Post #408445 of 428047
dws: Apparently Merritt did not make the article statement about doubling profitability. I emailed IDCC about it and received the following response:
"I believe the reporter simply performed the arithmetic: if we meet our goal of $500-600 million while maintaining our objective of relatively flat expenses, it stands to reason that after payment of taxes the dropping of revenue to our bottom line would have an important impact on profitability."
zdog: According to the following comments made during the 1st qtr conference call, the Huawei licence is fixed fee, not per unit.
"Looking forward to Q2, we expected our recently completed renewal with Huawei, combined with contributions from other fixed price agreements will help drive another strong quarter, even as global shipments of smartphones are expected to decline substantially.
Collectively, our fixed priced agreements make up more than 90% of our revenue and includes substantially all of our key licensees, including Apple, Samsung and now Huawei."
my3sons:
IDCC's published rate schedule is at:
https://www.interdigital.com/rate-disclosure?preview=true
I'm sure actual negotiated rates can vary significantly.
Gamco: Possible reason why IDCC filed infringement action against Xiaomi in India
India Surpassed the USA to Become the Second Largest Smartphone Market in the World Reaching 158 Million Shipments in 2019
January 24, 2020
|In Press Releases|By Anshika Jain
Xiaomi continues to capture the number one position for the second successive year.
https://www.counterpointresearch.com/india-surpassed-usa-become-second-largest-smartphone-market-world-reaching-158-million-shipments-2019/
Gamco: As you thought, the original revenue sharing agreement with Technicolor no longer applies. Now the only revenue sharing is in regard to Technicolor's agreement with Sony. As of the end of 1st qtr 2020, there apparently was no payment due under the revised agreement.
From the 1st qtr 10-Q:
The original revenue-sharing arrangement between the Company and Technicolor created a contingent consideration liability upon closing of the Technicolor Patent Acquisition in third quarter 2018. Refer to our 2019 Form 10-K for further information on the initial contingent consideration liability which was accounted for at fair value each reporting period.
Under the amended revenue-sharing arrangement described above, Technicolor will now receive 42.5% of future cash receipts from new licensing efforts from the Madison Arrangement (as defined below) only, subject to certain conditions and hurdles, but will no longer receive revenue-sharing from other licensing efforts in the consumer electronics field outside of the Madison Arrangement. We determined that the initial contingent consideration liability from the Technicolor Patent Acquisition was significantly modified in conjunction with the R&I Acquisition, and, as such, the contingent consideration liability is now accounted for under ASC 450 - Contingencies under the asset acquisition framework when the liability is deemed probable and estimable. As of March 31, 2020, the contingent consideration liability from the amended revenue-sharing arrangement was deemed not probable and estimable and is therefore not reflected within the consolidated financial statements.
SNIP
Madison Arrangement
In conjunction with the Technicolor Patent Acquisition, effective July 30, 2018, we assumed Technicolor’s rights and obligations under a joint licensing program with Sony Corporation ("Sony") relating to digital televisions and standalone computer display monitors, which commenced in 2015 and is referred to as the "Madison Arrangement." We also assumed Technicolor's role as sole licensing agent for the Madison Arrangement. As licensing agent, we are responsible for making decisions regarding the prosecution and maintenance of the combined patent portfolio and the licensing and enforcement of the combined patent portfolio in the field of use of digital TVs and computer display monitors on an exclusive basis during the specified term in exchange for an agent fee. The Madison Arrangement falls under the scope of ASC 808, Collaborative Arrangements ("ASC 808"). Refer to our 2019 Form 10-K for further information on the Madison Arrangement.
my3sons: Not a very impressive list of new licensees; but, I guess every little bit helps.
Jim: There is no general ban on the sale of Huawei smartphones in the US. The ban is on infrastructure equipment. Although Huawei was second in worldwide smartphone sales, in the US it's sales were almost non existent. The problem was that there was a ban on the use of Google Android apps. The following is from a good article on the subject:
" The US export ban mainly affects Huawei's access to smartphone software—the ban blocks the company from accessing Google's Android ecosystem including the Play Store and its millions of apps, Google Play Services, and killer Google apps like Gmail, Google Maps, Chrome, YouTube, the Google Assistant, and more. The ban also means Huawei can't carry US-made apps in its app store, like Facebook, WhatsApp, Instagram, Snapchat, Netflix, Uber, Lyft, Amazon, Twitter, and a ton of other apps."
https://arstechnica.com/gadgets/2020/03/huawei-reportedly-expecting-a-20-drop-in-phone-sales-thanks-to-export-ban/
MONTEREY:Interesting that the more official 8-K filing does not contain the wording regarding the licensing of essential patents that the the press release has. As usual we are in the dark as to more specific details.
Item 8.01.
Other Events.
On April 28, 2020, InterDigital, Inc. (“InterDigital”) announced that it and certain of its subsidiaries had entered into a multi-year, worldwide, non-exclusive, fixed-fee patent license agreement (the “Agreement”) with Huawei Investment & Holding Co., Ltd. (“Huawei”). The Agreement covers the sale of certain of Huawei’s 3G, 4G and 5G terminal unit products, including the use of Wi-Fi and HEVC in those products, and extends through December 31, 2023.
In connection with the Agreement, InterDigital and Huawei have agreed to terms for dismissal of all outstanding litigation and other proceedings among them and their affiliates, including, without limitation, the actions previously disclosed in InterDigital’s Annual Report on Form 10-K for the year ended December 31, 2019 in the (i) Shenzhen Intermediate People’s Court and (ii) High Court of Justice, Business and Property Courts of England and Wales, Intellectual Property List (Chancery Division), Patents Court.
Paullee: Reviewing a corporation’s reported Executive Compensation can be complicated as it can be made up of various types of compensation and the reported amounts are often based on projections and specified criteria.
I assume your 13% “salary” increase was based on a comparison of the total amounts reported for Merritt on the Summary Compensation Table (Page 39) of $3,009,287 for 2018 , and $3,416,967 for 2019. In fact, his “salary” is only a small part of the reported compensation. As reported “Mr. Merritt’s base salary increased by 4.5% effective April 1, 2019” from $660,000 in2018 to $690,000 in 2019.
Merritt’s reported executive compensation for 2019 is made up primarily of various stock related grants rather than cash salary with the $3,416,967 consisting of the following:
Salary 681,346
Stock Awards 1,083,383
Options 1,083,383
Non-Equity Incentive Plan Compensation 555,450
Other 13,406
Total 3,416,967
As noted. stock awards and options represent the majority of the reported compensation; however, the amounts are computed amounts for accounting and reporting purposes, not actual payments. the following is one explanation as explained by footnotes to the reported amounts:
“Grant date fair value of RSU awards is determined in accordance with FASB ASC Topic 718. The TRSU awards granted in 2019 are scheduled to vest in full on March 15, 2022. Amounts reported for performance-based RSUs are based upon the probable outcome of the performance conditions, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. As of the date of grant, the probable outcome of the performance conditions for the 2019 LTCP did not meet the threshold for recording compensation cost, and, as a result, the grant date value of the performance-based RSU awards was $0. Accordingly, there is no value reported for the performance-based RSUs granted in 2019. Amounts reported also reflect the value at the grant date of the stock options granted in 2019 as determined in accordance with FASB ASC Topic 718. The weighted-average assumptions underlying the above valuation of the stock options for Mr. Merritt and Mr. Öistämo under the Black-Scholes option pricing model are as follows: expected life of 4.5 years; volatility of 25.8%; a risk-free interest rate of 2.4%; and a dividend yield of 2.0%. “
To illustrate, in 2019 Merritt received options for 79,192 shares with an exercise price of $67.61, expiring on 3/15/26. Right now they have no value, but with a relatively long term expiration date, using the Black-Scholes option model a current value was computed for accounting and reporting purposes.
Another example of the problem in reviewing executive compensation are the following comments in the proxy statement where they compare what they call “Target Compensation” against “Actual Compensation”
"Based on the company’s performance in 2019, compared to the target value, the CEO’s actual compensation for 2019 was just 39% of his target opportunity. For this purpose, realized compensation includes base pay, annual incentive, value of RSUs vested, value of PSUs vested and value of options vested."
"$3,880,000 Target Compensation represents 2019 base salary, 2019 target annual incentive, and grant date target value of equity granted pursuant to 2017 LTCP, which vested in March 2020.
$1,506,000 Actual Compensation represents 2019 base salary, 2019 actual annual incentive, paid in February 2020, and the value realized upon vesting of the 2017 LTCP time-based RSU awards and performance-based RSUs based on the performance achieved, which vested in March 2020."
Not much else to do during the sStay at Home days.
Gamco: The following cite will give you access (Download) to the DOJ filing.
https://www.justice.gov/atr/case-document/376726
Paullee: As my3sons stated, although the recipient could pay cash to settle their tax liabilities when share are awarded, the normal practice is for the company to sell sufficient shares to cover the liability. The following is IDCC's policy regarding the withholding of taxes due on awards:
"Withholding of Taxes. Notwithstanding any contrary provision of this Award Agreement, no certificate representing the Shares will be issued to Participant, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of income, employment, social insurance, payroll and other taxes which the Company determines must be withheld with respect to such Shares. Prior to vesting and/or settlement of the Restricted Stock Units, Participant will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment obligations of the Company and/or the Employer. In this regard, Participant authorizes the Company and/or the Employer to withhold all applicable tax withholding obligations legally payable by Participant from his or her wages or other cash compensation paid to Participant by the Company and/or the Employer or from proceeds of the sale of Shares. Alternatively, or in addition, if permissible under applicable local law, the Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit or require Participant to satisfy such tax withholding obligation, in whole or in part (without limitation) by (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum amount required to be withheld, (iii) delivering to the Company already vested and owned Shares having a Fair Market Value equal to the amount required to be withheld, or (iv) selling a sufficient number of such Shares otherwise deliverable to Participant through such means as the Company may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. To the extent determined appropriate by the Company in its discretion, it will have the right (but not the obligation) to satisfy any tax withholding obligations by reducing the number of Shares otherwise deliverable to Participant and, until determined otherwise by the Company, this will be the method by which such tax withholding obligations are satisfied. If Participant fails to make satisfactory arrangements for the payment of any required tax withholding obligations hereunder at the time any applicable Restricted Stock Units otherwise are scheduled to vest pursuant to Section 3 or tax withholding obligations related to Restricted Stock Units otherwise are due, Participant will permanently forfeit such Restricted Stock Units and any right to receive Shares thereunder and the Restricted Stock Units will be returned to the Company at no cost to the Company."
my3sons: In US the active case is against Lenovo which is still in the early stages. Current action is in regard to Lenovo's motion to dismiss for failure to state a claim.
In UK haven't been able to find info on cases against Huawei and Lenovo which are still in preliminary stages. These cases are somewhat dependent on how the UK Supreme Court will rule in the Unwired Planet vs Huawei case.
my3sons: Based on the following comment in another article about the Huawei infringement suit against Verizon, It would seem that Huawei should be suing Verizon's suppliers rather than Verizon>
Huawei said Verizon is providing access to infringing technologies and services that use Huawei patented technology, “such as Cisco Integrated Service Routers, Aggregation Services Routers, Network Convergence Systems, Nexus Switches, Catalyst Switches, and Clouds Services Router 1000v series, which facilitate communications throughout Verizon’s networks.”
https://www.reuters.com/article/us-china-huawei-verizon/huawei-sues-verizon-over-patents-verizon-blasts-pr-stunt-idUSKBN2000GR
Ia-tsla-fan: The speaker was referring to what is commonly called "rain fade". It is nothing new but occurs mostly in higher frequencies. As usual there are engineering solutions available. For more on the subject:
https://en.wikipedia.org/wiki/Rain_fade
dndodd: Feb 20 is an estimated date put out by NASDAQ.
InterDigital, Inc. Common Stock (IDCC) Earnings Report Date
Earnings announcement* for IDCC: Feb 20, 2020
InterDigital, Inc. is estimated to report earnings on 02/20/2020. The upcoming earnings date is derived from an algorithm based on a company's historical reporting dates. Our vendor, Zacks Investment Research, might revise this date in the future, once the company announces the actual earnings date. According to Zacks Investment Research, based on 2 analysts' forecasts, the consensus EPS forecast for the quarter is $0.27. The reported EPS for the same quarter last year was $0.05.
https://www.nasdaq.com/market-activity/stocks/idcc/earnings?
Gamco: IDCC's new "transparency initiative" is all well and good in describing their licensing program; however, until they are a lot more transparent about the actual licenses signed, we will have no idea about how good their licensing program actually is.
clamcakes: Don't know about his IDCC predictions; but, according to this service, the predictions of the B. Riley analyst who wrote the report, havn't been too successful.
"In a report released today, Eric Wold from B.Riley FBR reiterated a Buy rating on InterDigital (IDCC), with a price target of $90.00. The company’s shares closed last Monday at $55.78.
According to TipRanks.com, Wold has 0 stars on 0-5 star ranking scale with an average return of -8.2% and a 33.9% success rate. Wold covers the Services sector, focusing on stocks such as National Cinemedia, Cinemark Holdings, and AMC Entertainment.
Currently, the analyst consensus on InterDigital is a Moderate Buy with an average price target of $97.00."
https://www.smarteranalyst.com/new-blurbs/b-riley-fbr-reiterates-their-buy-rating-on-interdigital-idcc-3/
my3sons: There were two subsequent continuation patents in the '244 family. However, since they trace back to the original application filed in Sep 1999, they also should hve expired last year.
See my previous post:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=152552787&txt2find=%27%27244
my3sons: You keep referring to the '244 patent as an important patent. As has been previously commented on the board the '244 patent is part of a continuation patent family that originated in an application that was filed on 9/21/1999. Therefore, IAW patent law the'244 patent, although issued in 2013, expired on 9/21/2019. In any infringement action no future damages can be awarded, and past damages are subject to statute of limitations.
"I. CONTINUING APPLICATIONS
A patent granted on a continuation, divisional, or continuation-in-part application that was filed on or after June 8, 1995, will have a term which ends twenty years from the filing date of earliest application for which a benefit is claimed under 35 U.S.C. 120, 121, 365(c), or 386(c) regardless of whether the application for which a benefit is claimed under 35 U.S.C. 120, 121, or 365(c) was filed prior to June 8, 1995.'
https://www.uspto.gov/web/offices/pac/mpep/s2701.htm
The following is an event summary of the '244 patent application: number US12/615,098:
1999-09-21 Priority to US09/400,136
2009-11-09 Application filed by IPR Licensing Inc
2010-08-12 Publication of US20100202425A1
2011-07-26 First worldwide family litigation filed
2013-02-19 Publication of US8380244B2
2013-02-19 Application granted
2019-09-21 Anticipated expiration
2020-01-11 Application status is Expired - Lifetime
https://patents.google.com/patent/US8380244?oq=8380244
The terms consumer electronics and revenue sharing indicate that the new license is related to the Technicolor acquisition. Below are abstracts from IDCC's 3rd qtr 10-Q regarding revenue sharing related to the Technicolor acquisition. As described the terms are complicated with different parties involved. This probably explains why the guidance was delayed.
Acquisition of Technicolor's Research & Innovation Unit
On May 31, 2019, we completed the acquisition of the Research & Innovation, or R&I, unit of Technicolor SA. (snip) Technicolor agreed to reduce its rights under the revenue-sharing arrangement entered into as part of the Technicolor Acquisition, as further discussed below.
Contingent Consideration
The original revenue-sharing arrangement between the Company and Technicolor created a contingent consideration liability upon closing of the Technicolor Acquisition in third quarter 2018. (snip)
Under the amended revenue-sharing arrangement described above, Technicolor will now receive 42.5% of future cash receipts from new licensing efforts from the Madison Arrangement (as defined below) only, subject to certain conditions and hurdles, but will no longer receive revenue-sharing from other licensing efforts in the consumer electronics field outside of the Madison Arrangement.
Madison Arrangement
In conjunction with the Technicolor Acquisition, effective July 30, 2018, we assumed Technicolor’s rights and obligations under a joint licensing program with Sony Corporation (“Sony”) relating to digital televisions and standalone computer display monitors, which commenced in 2015 and is referred to as the "Madison Arrangement." We also assumed Technicolor's role as sole licensing agent for the Madison Arrangement. As licensing agent, we are responsible for making decisions regarding the prosecution and maintenance of the combined patent portfolio and the licensing and enforcement of the combined patent portfolio in the field of use of digital TVs and computer display monitors on an exclusive basis during the specified term in exchange for an agent fee.
Long-term debt
An affiliate of CPPIB Credit Investments Inc. ("CPPIB Credit"), a wholly owned subsidiary of Canada Pension Plan Investment Board, is a third-party investor in the Madison Arrangement. CPPIB Credit has made certain payments to Technicolor and Sony and has agreed to contribute cash to fund certain capital reserve obligations under the arrangement in exchange for a percentage of future revenues, specifically through September 11, 2030 in regard to the Technicolor patents.
Upon our assumption of Technicolor’s rights and obligations under the Madison Arrangement, our relationship with CPPIB Credit meets the criteria in ASC 470-10-25 - Sales of Future Revenues or Various Other Measures of Income (“ASC 470”), which relates to cash received from an investor in exchange for a specified percentage or amount of revenue or other measure of income of a particular product line, business segment, trademark, patent, or contractual right for a defined period. Under this guidance, we recognized the fair value of our contingent obligation to CPPIB Credit, as of the acquisition date, as long-term debt in our condensed consolidated balance sheet. This initial fair value measurement was based on the perspective of a market participant and included significant unobservable inputs which are classified as Level 3 inputs within the fair value hierarchy. The fair value of the long-term debt as of September 30, 2019 and December 31, 2018 is disclosed within Note 8. Our repayment obligations are contingent upon future royalty revenues generated from the Madison Arrangement and there are no minimum or maximum payments under the arrangement.
My3sons: This is all that the Stipulation states, with no supporting documents:
"STIPULATION AND [PROPOSED] ORDER OF DISMISSAL
Pursuant to Rule 41 of the Federal Rules of Civil Procedure, InterDigital Communications Inc., InterDigital Technology Corporation, IPR Licensing, Inc. and InterDigital Holdings, Inc., and ZTE Corporation and ZTE (USA) Inc., through their counsel of record, hereby stipulate that this action, including all claims and counterclaims, is dismissed with prejudice, with each party bearing its own fees and costs."
The 10-K should give more details of the agreement; but as usual, there will only be bits and pieces that will show up in various sections of the filing.
Monetarily the contract award is probably not significant. As noted in the announcement the project award is under the
Small Business Innovation Research Program (SBIR), and “will be carried out in three phases and is expected to conclude in 2022.” The following is from a description of the SBIR program (note highlighted).
“Phase I: The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed R/R&D efforts and to determine the quality of performance of the small business awardee organization prior to providing further Federal support in Phase II. SBIR Phase I awards normally do not exceed $150,000 total costs for 6 months.
Phase II: The objective of Phase II is to continue the R/R&D efforts initiated in Phase I. Funding is based on the results achieved in Phase I and the scientific and technical merit and commercial potential of the project proposed in Phase II. Only Phase I awardees are eligible for a Phase II award. SBIR Phase II awards normally do not exceed $1,000,000 total costs for 2 years.
Phase III: The objective of Phase III, where appropriate, is for the small business to pursue commercialization objectives resulting from the Phase I/II R/R&D activities. The SBIR program does not fund Phase III. Some Federal agencies, Phase III may involve follow-on non-SBIR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government.”
http://acqnotes.com/acqnote/tasks/small-business-innovation-research-programsmall-bus
xdx: Here is IDCC"s announcement of the award:
https://finance.yahoo.com/news/interdigital-awarded-u-department-defense-100010496.html
The full article that you cited has some good non-technical background on the subject
From a commentary on Merritt's pay:
"In Summary...
William Merritt is paid around what is normal the leaders of comparable size companies.
Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves."
https://finance.yahoo.com/news/worry-interdigital-inc-nasdaq-idcc-130259403.html
Monterey: From a lengthy "Q&A guide to patent litigation in the UK (England and Wales)."
30. How long do patent infringement proceedings typically last?
Patent proceedings typically last around a year. The precise time will depend on the:
Length and complexity of the case.
Attitude of the parties.
Amount of active case management by the court.
Availability of court time.
If there is an assessment of damages, a further period will be required although most parties deal with damages by agreement.
https://uk.practicallaw.thomsonreuters.com/3-623-0277?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1
my3sons: What I am saying is that the timing of IDCC's revenue recognition (reporting) is not dependent upon the receipt of cash.
Under recently revised accounting rules, the timing and amounts of revenue recognition has become much more complicated. The following is the introduction to the subject, as reported in the last 10-K.
"Revenue Recognition
On January 1, 2018, we adopted ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" (ASC 606) using the modified retrospective method. Refer to Note 3, "Revenue Recognition," within the consolidated financial statements for further information regarding our adoption of this guidance. The discussion that follows below is a description of our revenue recognition practices in effect beginning January 1, 2018 under ASC 606.
We derive the vast majority of our revenue from patent licensing. The timing and amount of revenue recognized from each licensee depends upon a variety of factors, including the specific terms of each agreement and the nature of the deliverables and obligations. Such agreements are often complex and include multiple performance obligations. These agreements can include, without limitation, performance obligations related to the settlement of past patent infringement liabilities, patent and/or know-how licensing royalties on covered products sold by licensees, access to a portfolio of technology as it exists at a point in time, and access to a portfolio of technology at a point in time along with a promises to provide any technology updates to the portfolio during the term.
All of our agreements have been accounted for under ASC 606. This guidance requires the use of a five-step model to achieve the core underlying principle that an entity should recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. These steps include (1) identifying the contract with the customer, (2) identifying the performance obligations, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue as the entity satisfies the performance obligation(s). Additionally, we have elected to utilize certain practical expedients in the application of ASC 606. In evaluating the presence of a significant financing component in our agreements, we utilize the practical expedient to exclude any contracts wherein the gap between payment by our customers and the delivery of our performance obligation is less than one year. We have also elected to utilize the practical expedient related to costs of obtaining a contract where an entity may recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.
Timing of revenue recognition may differ significantly from the timing of invoicing to customers. Contract assets are included in accounts receivable and represent unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date (or cumulative adjustments to retained earnings in the initial period of adopting ASC 606) exceeds the amount billed, and right to payment is subject to the underlying contractual terms. Contract assets are classified as long-term assets if the payments are expected to be received more than one year from the reporting date. Contract assets due within less than twelve months of the balance sheet date are included within accounts receivable in our consolidated balance sheets. Contract assets due more than twelve months after the balance sheet date are included within other non-current assets."
my3sons: Whether cash is received from ZTE during the quarter should not affect the income statement. Based on the license terms IDCC will report appropriate income during the quarter, the offset will be accounts receivable rather than cash.