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mickey: I don't know why you expect to get anything from Nokia. The infringement case against them was dismissed.
On May 9, 2017, InterDigital entered into a Settlement Agreement and Release of Claims (the “Microsoft Settlement Agreement”) with Microsoft Corporation, Microsoft Mobile, Inc., and MMO, pursuant to which the parties agreed to terms for resolving all of their existing disputes and entered into a framework for future discussions for a patent license agreement and regarding technology collaboration in key areas. InterDigital and Microsoft also agreed to terms for dismissal by them and Nokia Corporation of all outstanding litigation and other proceedings among these companies and their affiliates. On May 15, 2017, InterDigital and Nokia/MMO filed a stipulation of dismissal of the case against MMO, Nokia Corporation and Nokia, Inc. pursuant to the Microsoft Settlement Agreement. On May 16, 2017, the Delaware District Court granted the stipulation and dismissed the case against MMO, Nokia Corporation and Nokia, Inc. with prejudice.
The case against ZTE remains pending.
mickey: As you stated you “ often don't understand what I have read.”
As far as your statement that “If this doesn't say limited up to 10 megahertz what does it say? “ The question is what are you referring to? The actual statement basically stated that the IDCC sublicense contained in QCOMs license agreement with a device manufacturer “is limited to use in Wireless Applications which spread the CDMA signal over not more than a 10 MHz bandwidth.” As written the limitation is just on the licensee's applications, any other use of the specified IDCC patents by the QCOM licensee, would allow IDCC to sue the QCOM licensee for patent infringement.
In addition the question in your earlier posts that “Is this limiting the use of CDMA to a certain amount of bandwidth and after that bandwidth it becomes the property of IDCC?” has no relationship at all to the actual situation, and I have no idea what you are referring to.
mickey: The wording was "not more than a 10 MHz bandwidth." In general, 2G CDMA is at 1.25 MHz, 3G WCDMA is at 5 MHz, and 4G LTE is listed at 5, 10, 15, 20MHz.
Since QCOM’s license agreement was open ended with no termination date, the license term would cover future technologies, not just those existing at the time of the license, and would have applicability.
“2. TERM OF AGREEMENT.
This Agreement shall commence upon the Effective Date and, unless otherwise terminated or canceled as provided herein, shall continue in full, force and effect thereafter.”
mickey: I do’t know why you have suddenly become interested in the old 1994 settlement agreement with QCOM.
I believe the sentence you are quoting is not from the QCOM/IDCC settlement agreement, but is from QCOM's licenses with device manufacturers.
For some background, as noted in IDCC’s 2003 10-K:
"Additionally, in 1994 we entered into a paid-up CDMA-based patent license agreement with Qualcomm, Inc. (Qualcomm) that is limited in scope. The Qualcomm license excludes, among other things, any rights under our patents as regards TDMA standards, any rights under any of our patent applications filed after March 7, 1995, any rights under the patents and applications subsequently acquired, such as was the case with Windshift, and any rights to any patents relating to cellular overlay and interference cancellation. The Qualcomm license agreement grants Qualcomm the paid-up right to grant sub-licenses under designated patent and patent applications to Qualcomm’s customers. For some of our patents, Qualcomm’s sublicensing rights are limited to those situations where Qualcomm is selling ASICs to the customer. For a limited number of patents as to which applications were filed prior to March 8, 1995, Qualcomm may grant licenses under such ITC patents regardless of whether the customer is also purchasing an ASIC from Qualcomm. Based on these limitations, Qualcomm is not licensed under either all of our patents that we believe are essential to 3G, including cdma2000, or all of the inventions which we believe will be essential and which are contained in pending patent applications. The proportion of essential Company patents under which Qualcomm is licensed has diminished substantially over time as the Company has been inventing and acquiring technology at an accelerating rate since early 1995.
http://ir.interdigital.com/Cache/1500085339.PDF?O=PDF&T=&Y=&D=&FID=1500085339&iid=4103938
An example of QCOM license terms regarding the IDCC patents, including the the same wording as your sentence is their 2000 license agreement with Axesstel, Inc. [see highlighted subpart c]:
“5. QUALCOMM LICENSE.
5.1.1 InterDigital’s Patents. The license granted by QUALCOMM under Section 5.1 with respect to InterDigital’s Patents is subject to all other limitations set forth in this Agreement which are applicable to all of QUALCOMM’s Intellectual Property licensed hereunder and is also subject to the following limitations:
a. No provision set forth herein shall be construed so as to grant any right or license under InterDigital’s Included Patents with respect to time division multiple access (TDMA) technology; provided, however, that such limitations shall not in any way limit any of the rights granted under this Agreement to utilize InterDigital’s Patents to implement the CDMA (or non-TDMA) aspects of any Subscriber Units, even if such Subscriber Units include TDMA; provided, however, in such case only the non-TDMA use of such Subscriber Unit will be licensed under InterDigital’s Patents. By way of example, if a Subscriber Unit can operate in both IS-54 (TDMA) and IS-95 (CDMA) modes, the use of such Subscriber Unit in the IS-54 TDMA mode would not be licensed.
b. With respect to those Subscriber Units manufactured and Sold by LICENSEE which do not incorporate CDMA ASICs purchased from QUALCOMM (the “Non-CDMA ASIC Subscriber Units”), the license granted by QUALCOMM under InterDigital’s Patents may terminate in accordance with the provisions set forth below:
i. After November 2, 1996. If, at any time after November 2, 1996, LICENSEE (or its Affiliate) initiates a CDMA patent infringement lawsuit against InterDigital or its affiliates (or their customers) asserting that any product manufactured and sold by InterDigital for use in non-IS-95 based wireless applications infringes any patents and LICENSEE (or its Affiliate) does not prevail in such lawsuit, then the license under InterDigital’s Patents granted by QUALCOMM to LICENSEE under this Agreement, with respect only to Non-CDMA ASIC Subscriber Units, shall immediately terminate.
ii. Subscriber Units that Contain QUALCOMM’s CDMA ASICs. Notwithstanding whether or not the license under InterDigital’s Patents terminates as to Non-CDMA ASIC Subscriber Units, as set forth in paragraph b. i. above, Subscriber Units manufactured and Sold by LICENSEE which do incorporate CDMA ASICs purchased from QUALCOMM will remain licensed under InterDigital’s Patents pursuant to Section 5.1.
c. The license under InterDigital’s Patents is limited to use in Wireless Applications which spread the CDMA signal over not more than a 10 MHz bandwidth.”
https://www.sec.gov/Archives/edgar/data/1092492/000119312504140764/dex103.htm
In writing PLA’s, normal words/phrases are capitalized when the agreement has a specific definition for the word/phrase. In your sentence the phrase“ InterDigital’s Patents” has the following specific definition:
““InterDigital’s Patents” means (i) with respect to those Subscriber Units Sold by LICENSEE which incorporate CDMA ASICs purchased from QUALCOMM, the InterDigital Included Patents and (ii) with respect to those Subscriber Units Sold by LICENSEE which do not incorporate CDMA ASICs purchased from QUALCOMM, InterDigital’s Five Patents.”
As noted the definition contains it’s own capitalized phrases, which in regard to IDCC’s patents are “InterDigital Included Patents” and “InterDigital’s Five Patents” . These have their own definitions, which includes another patent phrase “Subsequently Issued InterDigital Patents”.
As you can see, in trying to legally understand what the sentence means things can be quite complicated. My simple explanation is that QCOM CDMA chips had features covered by certain IDCC patents. IDCC agreed to license these patents to QCOM. In addition, IDCC agreed that when these chips were sold to device manufacturers they would have a sublicense from IDCC, thereby preventing IDCC from filing an infringement suit against the device manufacturers. In addition, the “not more than a 10 MHz bandwidth” wording indicates that based on bandwidth standards the sub license was limited to chips used in the device manufacturers: 2G based CDMA , 3G WCDMA, and some 4G LTE products.
Jim: Actually for the current (2017) year, a drop in the tax rate to 20% would have no effect. As stated in the latest 10-Q:
"In first nine months 2017, based on the statutory federal tax rate net of discrete federal and state taxes, our effective tax rate was a provision of 19.8%."
Because of various adjustment the current year's effective tax rate is unusual. Previous years effective tax rates have been very close to the normal 35% rate
2016 27.7%
2015 35.7
2014 33.9
2013 42.0
2012 33.5
2011 28.2
2010 35.6
For a simple calculation, for every $100 million in pretax profits a drop in the effective tax rate from 35% to 20% would result in increased profits of $15 million, or approximately $0.43/share based on 35 million shares outstanding.
LTE: you are right, I missed that. In order to file an appeal a court has to issue a final judgement. Because the case was bifurcated, the jury/court only ruled on the technical aspects of infringement. Besides damages, ZTE's counterclaims and other asserted defenses that could affect the infringement ruling were to be tried at a later date. ZTE apparently thought they had a good case, so In order to obtain a "partial" final judgement on the infringement aspect of the case, ZTE agreed to drop the other infringement related defenses.
The district court should start working next week on rescheduling the damages portion of the case.
monterey: I believe the use of the phrase "not invalid" is based on the fact that all issued patents are considered valid. Therefore, it is up to the challenger to prove that the patent is invalid. Because ZTE failed to do this, the decision was that the patent was not found to be invalid.
35 U.S. Code § 282 - Presumption of validity; defenses
US Code
(a)In General.—
A patent shall be presumed valid. Each claim of a patent (whether in independent, dependent, or multiple dependent form) shall be presumed valid independently of the validity of other claims; dependent or multiple dependent claims shall be presumed valid even though dependent upon an invalid claim. The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.
my3sons: At this stage, I doubt whether IDCC could assert a new patent. It would be the same as starting the case all over again.
my3sons: ZTE can afford to continue to play games. The two patents that ZTE were found to infringe expired last year, so the damage award would be limited to product sales for a period before patent expiration.
my3sons: The case was bifurcated. Besides damages, ZTE's FRAND related defenses still have to be adjudicated.
Decision mostly technical, but summarized as follows:
The jury was entitled to reject the testimony of ZTE’s expert and rely on the testimony of InterDigital’s experts, the 3GPP technical specification, and the Qual- comm documents. We conclude that substantial evidence supports the verdict of infringement.
III
For the foregoing reasons, we affirm the district court’s judgment.
AFFIRMED
Gamco: Too bad that IDCC's license with Gemalto apparently was not renewed. see my prior post:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=127266315&txt2find=gemalto
An interesting filing in the ASUS case. IDCC has requested that since both ASUS and Pegatron had a relationship and that the issues involved in their separate cases are almost identical, the cases should be consolidated for judicial efficiency.
In June 2015, IDCC had also requested that the cases be consolidated. According to a filing:
“ Interdigital argues that the cases are related because (1) both actions concern disputes over “nearly identical” licensing agreements, (2) Pegatron was, when the licensing agreements were signed, a subsidiary of ASUSTeK Computer, Inc., one of the Plaintiffs in this action, and (3) the two actions involve “substantial overlapping issues.”
In rejecting the request the Judge agreed that while there were many similarities in the two cases , there were enough distinctive issues to keep them separate.
In IDCC’s current request, they now state that because of amended complaints that have been filed, and because of the recent arbitration decisions in both cases, the consolidation request should be granted.
lando: lando: The new guidance does not change how cash receipts will be accounted for. It is the related revenue i.e.income accounting that is affected.
Currently for all fixed fee license revenue accounting, IDCC reports revenues by amortizing the full amount of the license on a quarterly basis over the term of the agreement. Under the new standard, for the so called dynamic licenses there will be no change; however, for fixed fee licenses classified as static the full amount of the license will be recognized upfront upon entry into the agreement.
After the effective date of of the new standard, in order to avoid different reporting for existing static fixed fee licenses, companies had two options. They could either go back and issue revised reports for previous periods based on the new standard, or write off the unamortized balance by a one time write off to an equity account i.e. retained earning. I believe IDCC and most other affected companies will use the write off option
lando: Although issued in 2014, in order to give companies time to adjust, the guidance is effective for the interim and annual periods beginning on or after December 15, 2017 .
The ruling guidance is complicated with separate rules for specific industries. The general attempt being to more closely tie in revenues with services rendered. For a simple example, for patent licenses my understanding is that if a fixed fee license is limited to existing patents as of the license effective date it would be classified as a static license with the total amount of the agreement recorded as revenue when the license is signed. If the agreement also covers patents issued during the license period it would be considered a dynamic license with the total fixed fee amount amortized over the license period. The guidance apparently also stated that any unamortized balances on existing static licenses can no longer be recorded as revenue
As to why IDCC may have a problem, as stated in the conference call IDCC's policy is to use dynamic fixed fee licenses, but because of special circumstances some static fixed fee licenses were issued.
"Currently, our practice is to spread revenue from both dynamic and static fixed fee agreements over the term of the license. Under the new standard, we will continue to recognize revenue from dynamic fixed fee agreements over the term of the license but will recognize revenue from static fixed fee agreements at the inception of the agreement. As things stand, a unique set of circumstances led to each of the static fixed fee agreements we currently have. We don't expect these circumstances to repeat in the future.
As a company, our general practice when discussing fixed fee agreements has been and will continue to be to offer fixed fee agreements that are dynamic in nature. But what happens to the static fixed fee agreements we have already signed. Well, as a result of the transition provisions of the new standard, beginning January 1, 2018 we will cease recognizing revenue from any static fixed fee agreements signed prior to January 1, 2018."
There is no way of knowing what the impact of Brezinski's comments had on the stock price. The fact that beating the analysts' estimates was caused by IDCC's playing with numbers tax adjustment, may also have been a factor
WayHaw: Although cash has been or will be received, the unamortized deferred revenue balance as of 12/31/2017 will not be recognized as revenue, but will be written off with a balance sheet adjustment.
"There is at least two ways to transition. But under either case, we will not recognize any revenue from those previously signed agreements in the future."
loophole: Besides the CC not having any specific news about new licenses or other revenue generating activities, I wonder whether the following comment about new revenue accounting guidance caused the selloff.
"As a company, our general practice when discussing fixed fee agreements has been and will continue to be to offer fixed fee agreements that are dynamic in nature. But what happens to the static fixed fee agreements we have already signed. Well, as a result of the transition provisions of the new standard, beginning January 1, 2018 we will cease recognizing revenue from any static fixed fee agreements signed prior to January 1, 2018.
To put that into perspective, on a year-to-date basis, we have recognized $220 million of recurring revenue from fixed fee agreements. Just under one-third of this amount relates to static fixed fee agreements. Beginning in first quarter 2018, we will not be permitted to continue recognizing revenue from those static fixed fee agreements."
What that means, if the new rules were in effect during the current year, total reported revenue for the nine months ending 30 September would have been
approximately $68 million less, or $260 million instead of $328 million.
Total recurring fixed fee revenue...............$220 million
X Static fixed fee contract percent............... 31%
=Non reportable revenue amount............... $68 million
Since for IDCC increases/decreases in revenue, except for taxes, directly effect reported earnings, the accounting change is very significant.
IDCC will be able to also report, as a footnote, what the amounts would have been under the current system, but it is the actual amounts that make the headlines.
mickey: For you information IDCC already has a license with ASUS and ASUS apparently is still paying royalties under the license.
What happened is that ASUS filed a district court lawsuit against IDCC primarily on various anti-trust grounds requesting that, in effect, the license be voided and monetary relief be granted. IDCC requested that instead of a court action all of ASUS's various claims be handled by arbitration. After a lot of legal actions, it was determined that only one of ASUS's claims (fraudulent inducement} would be dropped from the district court case and be handled by arbitration. That one claim is what the arbitration decision was all about.
The district court case covering ASUS's seven other claims is still going on with a trial scheduled for May 2019.
FISH: After an arbitration award the time limits are three months to file a motion to vacate, modify, or correct an award, and one year for a motion to confirm the award.
Apparently IDCC was the winner in the arbitration case with ASUS. On Friday (10/20) IDCC filed a motion with the CA Northern District Court to confirm the Final Award issued by the Tribunal on August 2, 2017. As usual all details were sealed.
According to the last quarter’s 10-Q, the arbitration only covered InterDigital’s breach of contract claims and Asus’s fraudulent inducement claim. I believe that IDCC’s breach of contract claim was that ASUS did not follow the PLA’s Disputes clause when they filed suit against IDCC. ASUS’s fraudulent inducement claim was potentially more serious. According to the 10-Q:
“With respect to its arbitration counterclaim for fraudulent inducement, Asus stated in its pleadings that it was seeking return of excess royalties (which totaled close to $63 million as of the August 2016 date referenced in the pleadings and has increased with additional royalty payments made by Asus since such time), plus interest, costs and attorneys’ fees.”
We should get more details, with this week’s earnings release and conference call, and the related 10-Q filing
Ia-idcc-fan: The Supreme Court decision regarding "article(s) of manufacture" should have no effect in regard to IDCC's patents. The term is specifically used in the statute that covers design patents, not the statute that covers IDCC's utility patents. The Apple/Samsung case discussed in Gamco's post is in regard to design patents.
"The statute examined by the Supreme Court is 35 U. S. C. §289, which provides a damages remedy specific to design patent infringement. Section §289 indicates that a person who manufactures or sells “any article of manufacture to which [a patented] design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit.”
http://www.ipwatchdog.com/2016/12/09/supreme-court-article-of-manufacture/id=75463/
Gamco: What is confusing about today's VIA announcement is that throughout the release they keep referring to the new entity as a defensive "patent bank" which is separate from but complimentary with the LTE "patent pool". I have no idea what the difference is between a "patent bank" and a "patent pool". For example in the introduction:
-Via Licensing Corporation today announced the creation of a defensive patent bank, a wholly-owned entity that provides a defensive aggregation solution in connection with the company’s Long Term Evolution (LTE) patent pool offering.
Actually the purpose of my original post was to point out that VIA has a published rate schedule, but that after a year we are still waiting to see Avanci's "coming soon" rate schedule.
Gamco: The way I read today's announcement is that VIA is adding the defensive patent pool to an already existing normal patent pool.
"Via Licensing Forms Defensive Aggregation Patent Bank for LTE Patents
New patent bank provides additional risk reduction for Via LTE pool licensees
October 18, 2017 08:30 AM Eastern Daylight Time
SAN FRANCISCO--(BUSINESS WIRE)--Via Licensing Corporation today announced the creation of a defensive patent bank, a wholly-owned entity that provides a defensive aggregation solution in connection with the company’s Long Term Evolution (LTE) patent pool offering.
“Creating a defensive patent bank to support the patent pool allows us to offer further value to the wireless industry and reduce barriers to innovation,” said Joe Siino, President of Via Licensing Corporation.
Via’s new patent bank serves as a resource for collecting rights to high-quality and essential LTE patents that might otherwise pose a risk for licensees, and providing licenses to these assets through Via’s LTE Patent Pool at no extra cost to licensees. All licensees in Via’s patent pool receive licenses to the relevant patents.
“With the introduction of its new defensive patent bank, Via continues to be a leader in promoting the LTE ecosystem, fostering technological advances, and making the licensing process easier and more transparent for everyone,” said Ira Blumberg, Vice President, Intellectual Property, Lenovo.
Via’s patent bank provides additional risk mitigation for current and future licensees of the Via pool because their licenses will include a greater number of high-quality LTE patents. In accordance with Via patent pool procedures, all patents offered for licensing by the patent bank through the pool are confirmed as essential to the LTE standard by an independent neutral evaluator.
"What Via is doing here is quite innovative. They are combining the benefits of a traditional patent pool, which are very significant, with a form of risk reduction in the area of patent litigation,” said Professor Robert Merges, a patent pool expert and professor of law at the University of California, Berkeley. “By taking unaffiliated patents 'out of circulation' they make life easier for pool members."
Gamco: VIA's LTE licensing fee schedule:
License Fees for each Licensed Product Sold or Otherwise Supplied:
General Terminal Products that are mobile phones and/or Mobile Computer Tablets (as defined in the LTE Patent License Agreement)
Volume (per unit/annual reset)
Per Unit Fee
For the first 1 to 100,000 units……No Fee
For units 100,001 to 1,000,000……$1.00
For units 1,000,001 to 2,500,000…$1.50
For units 2,500,001 or more///////////$2.10
In the event Licensee executes the LTE Patent License Agreement within six (6) months of becoming aware of the above License Fees for General Terminal Products that are mobile phones and/or Mobile Computer Tablets, then Licensee shall receive a 50% discount off the 100,001 to 1,000,000 volume tier annually, such that the effective per unit fee for that tier equals $0.50 per unit for the term of the LTE Patent License Agreement.
Via offers licenses for other General Terminal Products and LTE products such as data terminals and femtocells. For all LTE licensing inquires, please contact a Via representative at one of our worldwide offices
http://www.via-corp.com/us/en/licensing/lte/licensefees.html
Avanci on the other hand, although over a year old, has yet to publish their promised licensing fee schedule.
“Our royalty rates are coming soon!”
http://avanci.com/pricing/
I am confused why IDCC signed a license renewal with module maker u-bloc, but apparently did not attempt to sign renewal agreements with major module companies Sierra Wireless and Gemalto.
u-blox’s PLA apparently primarily relates to their wireless module products. As stated in today’s announcement
“We are pleased that u-blox is continuing its relationship with us, and delighted that our contributions to core wireless technology continue to deliver exciting solutions to the rapidly-growing IoT market,” said Lawrence F. Shay, President of InterDigital’s patent holding subsidiaries. “u-blox’s desire to extend its agreement highlights the strength of InterDigital’s research contributions and intellectual property, and positions u-blox to continue in the wireless module market.”
in 2012 IDCC signed licenses with wireless module makers Sierra Wireless, Cinterion (Gemalto),, u-blox , and Enfora (Novatel).
Based on revenues, Sierra Wireless and Gemalto are the market leaders covering approximately 50% of the cellular wireless module market; u-bloc's share was only about 5%.
https://www.counterpointresearch.com/sierra-wireless-and-gemalto-lead-the-iot-cellular-module-market-in-terms-of-revenue/
When IDCC issued their updated revenue guidance for 4th qtr 2016 the announcement stated:
“After the expiration later this month of certain module license agreements that overlap with the target markets of the Avanci IoT licensing platform, we see our annual royalty platform as being in the range of $360 million to $380 million,” said Richard J. Brezski, CFO of InterDigital.”
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=127266315&txt2find=
The statement indicated that the Sierra Wireless and Gemalto licenses, which expired in Dec 2016, would not be renewed based on the apparent belief that they would license with Avanci. To date there have not been any announcements about Avanci signing any licenses.
There is an interesting Risk Factor statement in the 10-K:
“Our strategy to diversify our patent-based revenue by pursuing alternative patent licensing arrangements and patent sales may not be successful. There is no guarantee that we will succeed in our pursuit of select patent licensing arrangements or patent sales, and, if we are successful, there is no guarantee that the revenue and cash flow generated through such alternative licensing arrangements (such as the Signal Trust and the Avanci licensing platform) or patent sales will be greater than the revenue and cash flow we would have generated if we had retained and/or licensed the patents ourselves.”
loophole: A supplemental, post in response to you question about warrant expiration.
Based on the wording of a couple of your posts earlier this year, I see that your reference to the 93 dollar warrants was in regard to the recently issued warrants, not the old ones as I had assumed. Based on the following comment from the last quarter's 10-Q, the warrants will expire between June and September 2020.
"Common Stock Warrants
On March 5 and March 9, 2015, we sold warrants to acquire, subject to customary anti-dilution adjustments, approximately 3.8 million and approximately 0.6 million shares of our common stock, respectively. As of June 30, 2017, the warrants had a strike price of approximately $88.14 per share, as adjusted. The warrants become exercisable and expire in daily tranches over a three and a half month period starting in June 2020. As consideration for the warrants issued on March 5 and March 9, 2015, we received approximately $37.3 million and approximately $5.6 million, respectively."
loophole: I assume you are referring to the old warrants issued in the 90's when IDCC was having financial difficulties, not the warrants issued in conjunction with the recent convertible note issues.
If my assumption is correct, there are no longer any outstanding old warrants with the last of these warrants expiring in 2006.
from 2008 10-K:
Common Stock Warrants
As of December 31, 2007 and December 31, 2006 we had no warrants outstanding.
From an old post of mine:
my3sons: There are still 80,000 warrants left. They will expire next month, so I am sure they will be exercised. It was the preferred stock that was redeemed.
"Common Stock Warrants
As of June 30, 2006, we had warrants outstanding to purchase 80,000 of Common Stock at an exercise price of $7.63 per share. These warrants are exercisable and will expire in September 2006."
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=12899225&txt2find=warrants
For those who do not know what I am referring to:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=6313371&txt2find=warrants
I vaguely remember reading one time that Jim also had some old warrants.
If you are referring to the warrants issued in conjunction with the recent note offering, the warrants became usable in lots spread out over different dates. However. the amounts and dates were not shown in the copy of the warrant agreement filed with the SEC. See last page (Schedule B) of filing document.
https://www.sec.gov/Archives/edgar/data/1405495/000119312515087314/d888367dex102.htm
loophole: My non technical and non legal comments.
If you go by questions asked by the Court, IDCC definitely came out ahead, as the Judge who was doing the questioning was constantly interrupting the ZTE attorney for clarification.
Without being familiar with the technical details, to me it seemed that the IDCC attorney strongly brought out that although the apparently conflicting previous CAFC decisions were in regard to the same basic terms, different patents were involved and different wording was used in the different patents to explain the terms.
I also noted that the ZTE made a point that IDCC did not appeal the ITC Commissions final decision in the 868 case, inferring that IDCC apparently believed they had no basis for appeal. However as stated in a 10-K filing (below), IDCC did file an appeal but later dismissed it because the patents were set to expire; therefore, even if IDCC won the appeal, the ITC could not issue an exclusion order. It was interestingg that another judge interjected into the questioning, and asked about patent expiration.
“On October 10, 2014, InterDigital filed a petition for review with the Federal Circuit, appealing certain of the adverse determinations in the Commission’s August 8, 2014 final determination including those related to the ’966 and ’847 patents. On June 2, 2015, InterDigital moved to voluntarily dismiss the Federal Circuit appeal, because, even if it were to prevail, it did not believe there would be sufficient time following the court’s decision and mandate for the USITC to complete its proceedings on remand such that the accused products would be excluded before the ’966 and ’847 patents expire in June 2016. The court granted the motion and dismissed the appeal on June 18, 2015.”
FISH: In this instance IDCC lost, as they were the ones that requested the dispute be handled by arbitration rather than through the court system.
mickey: In order to have an arbitration there has to be an agreement to arbitrate. In this case the license agreement had an arbitration clause. The typical clause would state that disputes about the interpretation of the contract terms would be subject to arbitration. In this case Pegatron argued that their counterclaims did not come under the arbitration clause so there was no basis for IDCC's arbitration request. When this situation occurs the basic rule is that it is up to the arbitrators to determine whether or not the disputed subjects come under the license agreement's arbitration clause. In this case the arbitrators agreed with Pegatron that the items in dispute were not covered by the arbitration clause, therefor there was no basis for them to conduct an arbitration.
Because the arbitrators ruled that the issues were not subject to arbitration, it will now be up to the district court to follow their normal case procedures, and issue a decision on the issues involved.
Paulee/my3sons: The links to the arbitration award documents are in PACER case docket filings. As usual in regard to arbitration awards, a motion was made to seal all the documents including the required "public" redacted copy.
Pegatron’s counter claim filing against IDCC at the District Court for Northern District of California which was stayed pending IDCC requested arbitration is back in play again. The arbitration panel determined that the claims were not arbitrable.
The following from the 10-K summarizes Pegatron’s counter claim:
Pegatron accused InterDigital of violating multiple sections of the Taiwan Fair Trade Act, violating Section Two of the Sherman Act, breaching ETSI, IEEE, and ITU contracts, promissory estoppel (pled in the alternative), violating Section 17200 of the California Business & Professions Code, and violating the Delaware Consumer Fraud Act. These counterclaims stem from Pegatron’s accusation that InterDigital violated FRAND obligations. As relief, Pegatron seeks a declaration regarding the appropriate FRAND terms and conditions for InterDigital’s “declared essential patents,” a declaration that InterDigital’s standard essential patents are unenforceable due to patent misuse, an order requiring InterDigital to grant Pegatron a license on FRAND terms, an order enjoining InterDigital’s alleged ongoing breaches of its FRAND commitments, and damages in the amount of allegedly excess non-FRAND royalties Pegatron has paid to InterDigital, plus interest and treble damages.
The following is the Court notice of the arbitrators decision:
NOTICE OF PARTIAL FINAL AWARD ON
ARBITRABILITY
Judge: Honorable Lucy H. Koh
The parties file this Notice of Partial Final Award on Arbitrability to inform the Court of the decision on arbitrability in accordance with the Court’s orders to continue the Case Management Conference, most recently on August 14, 2017 (see Dkt. No. 99).
On January 20, 2016, the Court granted InterDigital’s Motion to Compel Arbitration and Motion to Stay Pegatron’s counterclaims “to permit an arbitrator to rule on the arbitrability of those issues.” (see Dkt. No. 78 at 18). On September 21, 2017, the Arbitration Panel issued a Partial Final Award on
Arbitrability. A redacted, public copy of the Partial Final Award on Arbitrability signed by all members of the Arbitration Panel, along with an opinion concurring in part and dissenting in part by one member of the Arbitration Panel, is attached hereto as Exhibit 1, and the transmittal letter from the International Centre for Dispute Resolution is attached hereto as Exhibit 2. The Arbitration Panel determined by majority decision that none of Pegatron’s counterclaims are arbitrable. Accordingly, it granted Pegatron’s Motion to Dismiss for Lack of Jurisdiction and dismissed from the arbitration “Pegatron’s
counterclaims (and InterDigital’s mirror image claim for declaratory relief on Pegatron’s counterclaims).” Ex. 1 at p. 73, ¶ 152. Pegatron’s counterclaims are now before this Court for adjudication.
The Case Management Conference in this matter is scheduled for December 6, 2017. The parties will meet and confer as to a plan to move forward in this case and will submit a Case Management Conference Statement by November 29, 2017.
Dated: October 2, 2017
mickey: The key question is whether IDCC can compete against other companies offering "smart city" solutions.
Technology and innovation 2017-04-05
These are the top ten companies that build smart cities
According to a report by Frost & Sullivan, smart cities are anticipated to create huge business opportunities across different industries with a total market value of $1.565 trillion by 2020. Technologies such as smart metering, wireless sensor networks, open platforms, high-speed broadband and cloud computing are key building blocks of the smart city infrastructure. Research shows that two companies are top vendors in the “smart city” tech market with IBM and Cisco in podium positions. Which other companies supply the technology enabling smart cities to rise?
The ten companies below are the ones that already have a firm establishment in this evolving market, and will continue to increase their activities to get a large piece of the pie.
Smart cities are built by these top ten companies:
Cisco
Schneider Electric
Siemens
Microsoft
Hitachi
Huawei
Ericsson
Toshiba
Oracle
For more see
http://smartcityhub.com/technology-innnovation/the-top-ten-companies-that-build-smart-cities/
Apple faces down Qualcomm, Ericsson over EU patent fees
Foo Yun Chee react-text: 162 /react-text ?
BRUSSELS (Reuters) - The European Union is drawing up guidelines on how much patent holders should charge for their technologies, a thorny issue that pits Apple and other users against Qualcomm and Ericsson.
Trillions of dollars in sales are at stake as regulators ponder whether a fridge maker should pay a different rate for crucial patents than a carmaker, or whether a flat, fixed rate would be fairer.
The patent fee model used by world No. 1 smartphone chip designer Qualcomm, which bases royalties on a product’s total cost, predominates in the tech industry but is opposed by Apple and others in Silicon Valley.
Other models are in use and the EU aims to set a uniform one for Europe, opening a new front in a global dispute that has already seen multiple lawsuits between Apple and Qualcomm.
Antti Peltomaki, deputy director general at the European Commission, told a conference last week that the EU hopes to finalise its guidelines by the end of the year. They will not be legally binding but could provide a basis if the EU executive decides to enact rules in future.
The move is part of the bloc’s broader push to set new rules of the road for internet-connected devices beyond just computers and smartphones to cover cars, home automation and energy devices, aiming to ensure job creation and other economic benefits in the so-called Internet of Things (IoT) era.
The Commission, however, has yet to make a final decision on which technology patent fee model it favours.
Silicon Valley tech giants have sided with Apple, as have big Asian electronics makers who work for Apple, including Foxconn Technology Group.
Qualcomm, which holds what many experts see as the world's most lucrative smartphone patent portfolio, is backed by major mobile phone and network patent holders Ericsson and Nokia. (reut.rs/2yzqvCc)
Apple, the automotive industry and product makers say a fairer approach is to link royalties to the cost of the smallest saleable unit.
“It is not reasonable to charge more for use of the very same component in a Mercedes versus a Hyundai or a car versus a bicycle. This is discriminatory based on price of the end product, both within and outside of a particular product category,” Apple said of Qualcomm’s model in a May submission to the European Commission.
Apple and Qualcomm declined to comment for this story.
Industry estimates show IoT systems could represent a market of more than $11 trillion per year by 2025.
“There’s a lot of potential value at stake,” said Matthew Hunt, competition attorney with the law firm Bristows in London.
BALANCING ACT
Qualcomm’s royalty approach, known as used-based or value-based, is an important source of profits for other mobile pioneers such as Ericsson and Nokia.
Ericsson, once the world’s biggest mobile phone and network equipment maker, has fallen on hard times in the past decade in the face of stiff global competition. Still, with more than 42,000 patents giving it the largest number of mobile technology patents, it stands by the value-based licensing model.
“We need to be able to be flexible to differentiate the price. Flexibility is absolutely necessary,” Patrick Hofkens, Ericsson’s director of intellectual property rights policy, said.
Hofkens said that charging high royalty rates discourages product makers from adopting new innovations, while setting royalty rates too low undermines new technology developers from licensing their patents to industry standards bodies, which enable mass markets to take off.
“Price differentiation allows for lower prices for applications that do not use the patented technology as intensively as others,” the Ericsson executive said.
The European Commission has a tough balancing act, said Bristows’ Hunt.
“For any model, the main difficulty is going to be how to determine a fair rate. This has proven complicated enough in the mobile telecoms industry already, and it’s only going to get harder with new IoT enabled products,” he said.
The Qualcomm view means royalties for essential patents are based on the total cost of a product. Its previous patent licensing deal with Apple, for example, allowed it to take a percentage of the overall selling price for the iPhone, in exchange for supplying it with modem chips.
Lobbying group the App Association (ACT), backed by Apple, Facebook, Intel, Microsoft and Oracle, urged the commission not to rush into setting new guidelines.
IP Europe, another lobbying group whose members include Ericsson, Airbus, Nokia and Orange, says patent holders deserve a fair compensation.
“When they are contributors to a platform, they have expectations of fair remuneration,” the group’s executive secretary Francisco Mingorance said.
http://www.reuters.com/article/legal-uk-eu-technology-patents/apple-faces-down-qualcomm-ericsson-over-eu-patent-fees-idUSKCN1C71EO?il=0
IDCCfan: Below is the best (and simplest) explanation I have seen regarding FINRS's Daily Short Sale reporting. As described, most of the reported data is not really a "short" sale as we commonly think it is.
Short Sale Volume Reporting’s are deceiving.
I spoke to FINRA today and found out some very interesting things that until now I did not fully understand. I knew there was something wrong with this transparency of information but was not 100% sure what it was. I think I have my answer and it was enlightening.
I was first directed to the Notice to Members memo dated 9/29/2009
www.finra.org/Industry/Regulation/Notices/2009/P120045
The individual I spoke with wanted to make clear that to maintain proper trade volume reporting accuracy, a trade with multiple legs in the trade would only be reported once in the volume reports. The example given would be.
Investor A is long 100 shares and wants to sell. They enter the order through their broker that is routed to a market maker. That market maker will go out and sell the stock into the market before they have bought the stock from you/your broker to close out their account. They do not take possession first as there is no guarantee they can sell the order into the market. By this Notice, the actual sale INTO the market is a short sale because the market maker sold the stock into the market BEFORE they had purchased the stock from you. It is a technicality since they know there position will be closed out minutes later when they go in and buy your shares. To avoid doubling up on trade volume and distorting the picture, only the sale into the market (consolidated tape) is recorded and not the second leg which was the sale transaction between seller and market maker.
So, this is why the short sale volume is high but also why the FTD’s and bi-Monthly short interest reports are not showing any indications of this volume. The short isn’t really a short it is the execution of a long sale by a market maker. The key language in the FINRA notice is this:
Quote:
--------------------------------------------------------------------------------
The Daily Short Sale Volume File will provide daily access to the aggregate volume of short sales in NMS Stocks and OTC Equity Securities reported to a consolidated tape and traded over-the-counter during regular trading hours on each trading day.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=57101068
FISH/doctor: The large after hours trades reported are probably institutional trades that were instituted and executed during the day but the price not being set until the close. These trades are reported after hours.
from a FINRA explanation of “Trade Reporting Frequently Asked Questions"
Q100.8: What is the “time of execution” for purposes of the trade reporting rules?
A100.8: The time of execution is the time when the parties to a transaction have agreed to all of the essential terms of the transaction, including the actual price (e.g., the published closing price or end-of-day volume weighted average price (VWAP)) and number of shares to be traded. For example, at 10:00 a.m., member BD1 receives an order to purchase 100 shares that is to be priced at the end-of-day VWAP, and at 4:30 p.m., the VWAP is published. In this instance, the time of execution is 4:30 p.m., not 10:00 a.m.
http://www.finra.org/industry/trade-reporting-faq#312
——————-
From Interactive Brokers web page on “Guaranteed VWAP (Volume Weighted Average Price) Orders"
You want to buy 50,000 shares of large cap stock XYZ. At 9:00 a.m. You enter the order in TWS, selecting VWAP as the order type and entering 50,000 in the Quantity field. The order destination is automatically changed to VWAP and prices are no longer displayed. Submit the order. After the market closes, the VWAP order with the executing price is available via the Trades window.
https://www.interactivebrokers.com/en/index.php?f=603
InterDigital Expands Footprint in Europe With Opening of Berlin Office
Company Release - 9/21/2017 3:00 AM ET
WILMINGTON, Del., Sept. 21, 2017 (GLOBE NEWSWIRE) -- InterDigital, Inc. (NASDAQ:IDCC), a mobile technology research and development company, today announced that it has expanded its footprint in Europe with the opening of an office in Berlin.
The opening reflects InterDigital’s commitment to Europe, and the tremendous involvement of InterDigital Europe in a very broad range of research projects driven by the European Commission and its Horizon 2020 research initiative. InterDigital Europe is currently involved in 14 research initiatives across Europe, which bring together more than 75 partner companies, universities, research institutions and regional authorities.
“Europe is playing a central role in driving global research into advanced wireless, driving tremendous opportunities for companies and research institutions across the continent,” said Alan Carlton, Vice President, InterDigital Europe. “InterDigital’s increased investment reflects those opportunities, and Berlin’s vibrant tech community makes it the perfect location for InterDigital Europe to expand our footprint.”
patopinion: IDCC's current bylaws recognizes the existence of the current Rule 14a-8. Based on the wording it doesn't look like it would require much change.
2.12c(iii). If the Corporation is required under Rule 14a-8 under the Exchange Act to include a shareholder’s proposal in its proxy statement, such shareholder shall be deemed to have given timely notice for purposes of this Section 2.12 with respect to such proposal.
patopinion: The rule that you are referring to covers when a company MUST include a shareholder's proposal in a proxy statement. IDCC's bylaws, and I am sure those of other companies, contain the rules for submission of other proposals which may or may not be included in a proxy statement.
Introduction to Rule 14a-8:
§ 240.14a-8 Shareholder proposals.
This section addresses when a company must include a shareholder's proposal in its proxy statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders. In summary, in order to have your shareholder proposal included on a company's proxy card, and included along with any supporting statement in its proxy statement, you must be eligible and follow certain procedures.
https://www.law.cornell.edu/cfr/text/17/240.14a-8
For details of IDCC's Bylaws that detail proposal submission requirements see
Section 2.12 of IDCC’s Corporate Bylaws
http://ir.interdigital.com/Cache/1001210157.PDF?O=PDF&T=&Y=&D=&FID=1001210157&iid=4103938
Paullee; Thanks. I found the presentation to be the usual stuff; however, the questions posed by the interviewer and the related answers gave a little more information, although nothing earthshaking.
The thing I found interesting was the statement that $1 billion in cash was scheduled to be received from fixed fee licensees over the next 5 years. In the past, although the licenses would be for 5 years, the cash payments were usually made during the first two to 3 years.