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Paullee: I couldn't find the webcast on the IDCC investor cite.
http://ir.interdigital.com
Paullee: One idea to try and avoid a PTAB review.
Drug company hands patents off to Native American tribe to avoid challenge
If tribes can avoid patent challenges, will "patent trolls" flock to them next?
JOE MULLIN - 9/13/2017, 2:40 AM
A drug company has found a novel way to avoid challenges to some of its most prized patents: handing them off to a Native American tribe for safe-keeping.
On Friday, Allergan disclosed that it gave six patents covering its top-selling dry eye drug Restasis to the St. Regis Mohawk Tribe in Northern New York. The deal will provide the tribe with $13.75 million immediately and an annual royalty of $15 million as long as the patents are valid. The new deal was soon reported in both The New York Times and The Wall Street Journal.
Allergan made the unprecedented move because it will prevent any meaningful challenge to the company's patents at the Patent Trial and Appeal Board, or PTAB. Challenging patents at the PTAB in a process called "inter partes review" (IPR) was authorized by the America Invents Act of 2011, and the IPR process has significantly changed the patent landscape since then. While invalidating a patent in district court typically costs millions of dollars, invalidating a patent via IPR can happen for the relative bargain of a few hundred thousand dollars.
Lawyers for Allergan and the tribe expect that the concept of "sovereign immunity," which bars lawsuits against certain types of government entities, will protect patents owned by St. Regis from any IPR proceeding. In fact, university patents have already been found to be immune to IPR under the concept of sovereign immunity. That will give Allergan a major edge as it clashes with generic drug companies who are trying to knock out the patent so they can produce a cheaper generic version.
"The Saint Regis Mohawk Tribe and its counsel approached Allergan with a sophisticated opportunity to strengthen the defense of our RESTASIS intellectual property in the upcoming inter partes review proceedings before the Patent Trial and Appeal Board," Allergan Chief Legal Officer Bob Bailey said in a statement.
Given the potential power of the move, there's little doubt that tech companies, or the "patent trolls" that harangue them, will be next in line. In fact, at least one technology patent-holder has already done so. A lawyer for the St. Regis Mohawk Tribe told The New York Times that even before the Allergan deal, the tribe agreed to hold patents for a "technology company," which he declined to name.
Sovereign rights
"Sovereign immunity" is a legal concept that predates the American republic and stems from the basic notion that you can't sue a monarch, like, say, the King of England, in a court of law. It's codified in the 11th Amendment to the US Constitution, which prohibits "any suit in law or equity, commenced or prosecuted against one of the United States" by an individual.
While the amendment was written to apply to US states, Native American tribes enjoy the same immunity. So do state-owned universities, which have been able to use their own patents to extract settlements and verdicts without worrying about being subject to accusations of patent infringement.
And there's worry the matter could go beyond just stopping IPRs. Allergan CEO Brenton Saunders gave an interview to Reuters in which he said that the move "only affects the flawed IPR process," but tribal immunity has applied in federal court in other situations.
Josh Landau of the Computer and Communications Industry Association, a longtime patent reform advocate, said in a blog post yesterday that he's not sure the strategy will work. A Supreme Court case from last term called Lewis v. Clarke found that tribal commercial activity wasn't necessarily immune.
But more important than whether or not it will work, Landau argues that it shouldn't work. Hiding the patents with "sovereign" entities will simply allow people who own shaky patents to assert them more easily, without fear of IPRs. The rule shouldn't be that "the validity of your patents is subject to review, unless you pay off some Indian tribe," he writes.
St. Regis' general counsel, Dale White, told the Times that the royalty payments will be a significant boost to the tribe's annual budget, which is about $50 million.
The idea was broached to the tribe earlier this year by a Dallas law firm, Shore Chan DePumpo, White said.
https://arstechnica.com/tech-policy/2017/09/how-a-native-american-tribe-ended-up-owning-six-key-patents-on-an-eye-drug/
gejebr3: Nokia was/is a major infrastructure manufacturer. IDCC’s previous 2G license with Nokia covered both terminal units (mobile phones, etc) and infrastructure. However, IDCC’s complaints at the ITC, and the related District Court filings, only covered infringement by mobile phones. As noted in MSFT’s complaint wording, IDCC was trying to negotiate separate licenses with MSFT for mobile phones and infrastructure.
“63. In 2015, Signal Trust demanded that Microsoft take a license to the transferred InterDigital patents separate and apart from any license Microsoft might obtain from InterDigital for any remaining patents in InterDigital’s portfolio. Contemporaneously, InterDigital confirmed that its licensing demands for its portfolio exclusive of the patents transferred to Signal Trust had not been reduced from its prior demands for its entire portfolio”
Nokia did not transfer their infrastructure business to MSFT, they are still one of the top three infrastructure suppliers, and I believe that IDCC, through Signal Trust, can still go against them.
Gamco: I had some spare time so I looked up Microsoft's anti-trust complaint. Below are the complaint's wording regarding the setting up of Signal Trust:
Nature of Action
6. After deceiving the SSO and its members, InterDigital has exploited its
unlawfully acquired power against Microsoft. It has:
• transferred hundreds of SEPs to a controlled entity in order to “double dip” in its royalty demands;
INTERDIGITAL’S ABUSE OF ITS MONOPOLY POWER
58…….InterDigital’s creation of new licensing entities and assignment of selected SEPs to those entities has compounded this royalty stacking effect. InterDigital’s licensing conduct has thus subjected the Relevant Technology Markets to patent hold-up.
B. InterDigital’s Creation Of Additional Licensing Entities To Extract Higher
And Discriminatory Royalties.
62. In October 2013, shortly after Microsoft announced its intended acquisition of the Nokia Devices and Services business, InterDigital arbitrarily transferred hundreds of patents to a new licensing entity for enforcement against Standards implementing companies. InterDigital created the Signal Trust for Wireless Innovation (“Signal Trust”) as this new licensing entity.
InterDigital is the primary beneficiary of any licensing revenues secured by Signal Trust.
63. In 2015, Signal Trust demanded that Microsoft take a license to the transferred InterDigital patents separate and apart from any license Microsoft might obtain from InterDigital for any remaining patents in InterDigital’s portfolio. Contemporaneously, InterDigital confirmed that its licensing demands for its portfolio exclusive of the patents transferred to Signal Trust had not been reduced from its prior demands for its entire portfolio.
64. On information and belief, InterDigital had previously licensed Microsoft’s
competitors to its combined portfolio without requiring additional and separate royalties for rights to the patents transferred to Signal Trust. In this manner, InterDigital has discriminated against Microsoft to the advantage of Microsoft’s competitors and weakened Microsoft’s ability to compete in the sale of cellular devices.
E. Harm To Microsoft And To Competition In The Relevant Technology
Markets.
82. As a consequence of InterDigital’s transfer of patents to Signal Trust, Microsoft faces inherently discriminatory royalty demands for access to InterDigital’s SEPs. Standing alone, InterDigital’s transfer of patents necessarily added to the cost for access to the cellular technologies allegedly necessary for the manufacture of Standard-compliant products even beyond that which Microsoft would have paid in a competitive market, harming Microsoft’s ability to compete in the sale of cellular devices.
PRAYER FOR RELIEF
WHEREFORE, Microsoft respectfully requests that this Court enter the following relief in its favor and against InterDigital:
H. Injunctive relief requiring InterDigital to re-assign any declared SEPs that it has assigned to controlled entities, such as Signal Trust;
Gamco/my3sons: the Signal Trust was set up by IDCC in Oct 2013 with more than 500 infrastructure related patents and patent applications being transferred to the Trust. As the assignee i.e. owner of the patents it would be up to the Trust to license them.
https://globenewswire.com/news-release/2013/10/17/581359/10053144/en/InterDigital-Announces-Formation-of-Signal-Trust.html
There have been no announcements or indications that the Trust has yet signed any licenses. In fact, the only news information put out by the Trust since it’s formation was the announcement of it’s formation.
http://www.signalwirelesstrust.com
Since IDCC’s policy is to grant a worldwide license for all patents covered by the specific standards licensed, in one legal action ( I believe it was MSFT) an argument was made that since IDCC had not reduced their claimed royalty rates, the setting up of a separate entity to license infrastructure patents was a form of double dipping.
dmiller: Although your response clarifies your intent, based on the wording of your original post, IMO JohnSamuel"s comment was appropriate. Your post appears to relate Irma as the "trigger" needed to corrected your so called "bloated" market
"This mkt is bloated and needs to come down. Just waiting for a trigger.
Now...bring on IRMA"!
Finally have a date for CAFC's hearing on ZTE's appeal of the Delaware District Court's infringement decision.
Panel C: Wednesday, October 04, 2017, 10:00 A.M.
16-2362 DCT InterDigital Communications v. ZTE Corporation [argued]
bulldzr: From AB
To anyone who prayed for us during Harvey, thank you, thank you, thank you. We had water as close as 2 feet to our front door. It has subsided and we believe the worst is finally over. I never knew real stress until this last week. We will try to catch up on sleep for a few days and then get back normalcy. Again thanks.
loop
researching_stocks: Some short answers to your questions.
IoT revenues
I don’t believe IDCC has generated any IoT revenues, except possibly small reimbursement amounts that may have been included under technical assistance revenues. Their announcements about IoT appear to be mostly about tests that have or are being performed, rather than any firm licenses or contracts.
Is Hillcrest acretive
See my previous post on the subject:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=132228171&txt2find=Hillcrest
What is the progress on the LG license ? ….How about ZTE
There is no information as to the status of a new license with LG. There are no active legal actions going on so I would assume (hope) that they are still in some type of negotiations.
As far as ZTE they filed an appeal with the Federal Circuit regarding the Delaware District Court’s infringement judgement against ZTE with respect to the ’966 and ’847 patents. ZTE’s appeal is pending. As a result, InterDigital’s damages claims are currently effectively stayed pending the appeal.
How much is Avanci making from licensing, what was IDCC share of that revenue during the last quarter
There have been no announcements that Avanci has signed any licenses.
http://avanci.com/news/
IDCCfan: I wondered what the connection with IDCC was, but I see that they are part of the group pushing the NB-IoT standard.
InterDigital Joins Industry-Leading Peers in GSMA NB-IoT Forum
Company Expands Industry Ecosystem to Support Adoption and Growth of the IoT
Company Release - 3/21/2017 8:00 AM ET
http://ir.interdigital.com/File/Index?KeyFile=38623866
Paullee: The CAFC decision that the full court will review en banc is at the below cite. It is an interesting decision and is all about the interpretation of statute wording and also how the courts rely on precedents.
http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/16-1794.Opinion.6-20-2017.1.PDF
LTE/my3sons: With the trial scheduled for 2019 there are just routine legal actions going on. Below are all the court docket entries from 1 Jan 2017 to date. I am sure that when the arbitration award is issued the court will be notified.
07/10/2017 129 STIPULATION WITH PROPOSED ORDER RE: DISCOVERY OF ELECTRONICALLY STORED INFORMATION filed by ASUS Computer International, ASUSTeK Computer Inc. InterDigital, Inc., InterDigital Technology Corporation, InterDigital Patent Holdings, Inc., InterDigitalCommunications, Inc., and IPR Licensing, Inc. (Rauscher, Ezekiel) (Filed on 7/10/2017) Modified on 7/11/2017 (sfbS, COURT STAFF). (Entered: 07/10/2017)
07/10/2017 130 STIPULATION WITH PROPOSED ORDER Stipulated Protective Order filed by ASUS Computer International, ASUSTeK Computer Inc. InterDigital, Inc., InterDigital Technology Corporation, InterDigital Patent Holdings, Inc., InterDigitalCommunications, Inc., and IPR Licensing, Inc. (Rauscher, Ezekiel) (Filed on 7/10/2017) Modified on 7/11/2017 (sfbS, COURT STAFF). (Entered: 07/10/2017)
08/03/2017 131 MOTION for leave to appear in Pro Hac Vice for Brian P. Johnson ( Filing fee $ 310, receipt number 0971-11601173.) filed by ASUS Computer International, ASUSTeK Computer Inc. (Rauscher, Ezekiel) (Filed on 8/3/2017) (Entered: 08/03/2017)
08/04/2017 132 ORDER GRANTING 131 MOTION FOR PRO HAC VICE. Signed by Judge Beth Labson Freeman on 8/4/2017. (blflc4, COURT STAFF) (Filed on 8/4/2017) (Entered: 08/04/2017)
08/17/2017 133 STIPULATED ORDER RE: DISCOVERY OF ELECTRONICALLY STORED INFORMATION 129 . Signed by Judge Nathanael Cousins. (lmh, COURT STAFF) (Filed on 8/17/2017) (Entered: 08/17/2017)
08/17/2017 134 STIPULATED PROTECTIVE ORDER. Signed by Judge Nathanael Cousins on 8/17/2017. (lmh, COURT STAFF) (Filed on 8/17/2017) (Entered: 08/17/2017)
dws: As you say there are may trades and products involved in building construction. The size and project type i.e. new construction or repair/renovation, is also a consideration. Below is one study that describes the variety of sources used by builders.
BUILDER
WHERE DO BUILDERS SHOP FOR PRODUCTS?
The NAHB recently polled builders about where they purchase home building products and whether they—or someone else—make the final decision
By David Crowe
Home builders must find, evaluate, and purchase a long list of products and services to construct a home. Not only must they choose among different versions, prices, quantities, and qualities of the same product, but also across various providers. The builder also must decide when to allow the customer into the decision. How does anything get done?
NAHB recently asked builders where they purchase the products to build a home and whether they make the decision or leave the choice to the customer, the subcontractor, the architect, or the supplier. The findings tell a lot about the market for home building products.
Lumberyards and wholesale distributors are the primary suppliers to builders, but the products provided differ. Lumberyards provide about three-quarters of builders with dimension and engineered lumber, plywood, OSB, and housewrap. Lumberyards also supply over half of builders with trusses, trim, and millwork. About half as many builders get their trim and millwork from a wholesale distributor, although wholesale leads as the source for plumbing fixtures (42%), roofing (37%), gypsum board and electrical (38%), and roofing (37%).
Specialty retailers are the prime source for appliances and carpets (45% of builders), with wholesale distributors as the second most popular source (29% and 28%, respectively). Specialty retailers also are sourced for ceramic tile and other flooring materials (42%), with wholesale distributors close behind at 31%. Paint and countertops are obtained from specialty retailers by 40% of builders while wholesale distributors supply 25% of countertop orders, and manufacturers’ distribution centers fulfill 19% of paint orders.
A few items have several primary sources. Nearly one-third of builders buy cabinets from a specialty retailer, but nearly a quarter buy from a wholesale distributor and over one-fifth buy direct from the factory. Builders purchase insulation from both wholesale distributors (29%) and specialty retailers (19%); 27% of builders let their subs buy the material and don’t know where it comes from. Builders source tools most often from home improvement centers (43%), while 31% of builders buy tools from either a lumberyard or specialty retailer.
The more homes built, the more likely it is that the builder buys directly from the factory, from a manufacturers’ distribution center, or from a wholesale distributor compared to smaller building companies. The smaller the builder, the more likely purchases come from lumberyards and specialty retailers.
The choice on where to buy tends to lie with the builder. They make over 80% of the decisions on basic construction materials such as lumber and plywood, trusses, siding, housewrap, windows, and doors. About half of builders turn to their subs for electrical supplies and HVAC equipment, and roughly one-third of builders depend on subs for the purchase of gypsum wallboard, insulation, and paint. The highest frequencies for customer selections are appliances (36% of the builders), lighting (34%), and flooring (32%). Architects are allowed choices in very few situations and at most are used by 5% of builders for engineered lumber and trusses. The supplier is allowed to choose the product for builders in 10% of the cases for engineered lumber, trusses, and plywood.
NAHB asked the same questions in 2012, but the trends have not changed significantly. Appliances are more likely to come from specialty retailers in the latest survey, and direct factory buying is slightly less likely.
Builders make most of the basic material choices and the prime providers are lumberyards. If the builder does not shift responsibility to subs in specialties like electrical, HVAC, drywall, insulation, and paint, then the builder buys from wholesale distributors. The customer gets to pick on finishing items like appliances, lighting, and flooring, but when builders choose, they buy from specialty retailers.
http://www.builderonline.com/money/economics/where-do-builders-shop-for-products_o
FanOfspringsteen: Without seeing the analysts’ reports, no idea what calculations were used to justify their price targets. Below is an early June comment about B. Riley analyst Eric Wold, when he reiterated his buy rating with a $100 target (IDCC price was around $82 at the time). As described, his reasoning is more about possible future happenings, rather than something specific.
“The analyst believes the combination of meaningful past royalty payment obligations (which only grow each day), the acquisition of Hillcrest Labs and direct license agreements with Huawei and Apple provides IDCC with attractive negotiating leverage to get the remaining handset OEMs under license – which should drive a significant upside bias to forward projections and potential for share appreciation.”
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=132043084&txt2find=B.|Riley
mickey: You wonder why you are often criticized, it could be that your posts are often not based on reasonable assumptions.
In your calculation of potential yearly EPS of $5.25, you made two critical errors. First, and most important, although the rate may change you did not include any allowance for taxes to be paid. Second, your $98 million dollar revenue amount, included approximately $10 million for the one time final payment (value) of patents received under the Huawei license. As reported the high end range for normal recurring revenue was $88 million. Therefore your calculation should be revised as follows:
Normal recurring revenue………..$88 million
less: estimated expenses…………52
Equals: profit before tax……………36
Taxes @35% (approx)……………..12.6
Net profit……………………………..23.4
Yearly profit (X4)……………………93.6
Profit/share (35 million shares)….$2.67
The calculation is based on currently known factors. New revenue sources or changes in tax rates would change the calculation. However, the calculated EPS is close to the $2.78 amount reported yesterday by Research analysts at Dougherty & Co.
“InterDigital, Inc. (NASDAQ:IDCC) – Research analysts at Dougherty & Co raised their FY2018 earnings per share estimates for shares of InterDigital in a research report issued on Thursday. Dougherty & Co analyst C. Anderson now expects that the Wireless communications provider will earn $2.78 per share for the year, up from their previous estimate of $2.29”
eagle-i13: In addition to the reported purchases as far as buying stock with their own money, IDCC has a 401(k) plan (InterDigital Savings and Protection Plan) that as one of its options allows employees to invest their funds and the related employer contributions in an “INTERDIGITAL STOCK FUND”. According to Merritt’s latest filing he is the beneficial owner of 3,200 IDCC shares under his 401(k). Other officers have reported similar amounts.
In regard to other open market purchases, back in December 2000 the board came up with the following option giveaway program as an inducement for outside directors to purchase stock on the open market:
"As part of a program to increase ownership of Common Stock by Board members, the following Outside Directors were granted four (4) fully-vested options to purchase shares of Common Stock for each share of stock such directors purchased on the open market from December 21, 2000 to January 10, 2001 as follows: Mr. Campagna, 20,000 options; Mr. Colson, 52,800 options; Mr. Clontz, 48,000 options; and Mr. Roath, 76,190 options. The aggregate purchase price of shares eligible for the option match was capped at $100,000 for Outside Directors."
Jim: There are two basic SEC rules regarding stock buybacks.
Rule 10b5-1 covers how to set up a buyback program to avoid being charged with trading on inside information; and 10b18 covers mechanics of the actual buyback trading. For a simplified explanation:
http://www.investopedia.com/terms/r/rule-10b5-1.asp (See note below)
http://www.investopedia.com/terms/r/rule10b18.asp
note: While the introduction only mentions "selling" stock, as detailed in the article, the rule covers both buying and selling
From the 10-K:
The Company may repurchase shares under the 2014 Repurchase Program through open market purchases, pre-arranged trading plans or privately negotiated purchases.
mickey: Your recent posts are so confusing it is hard to understand what you are referring to.
In regard to your post which discusses some of Judge Gilstrap’s decisions, the post has two sub-articles regarding LG that you apparently are referring to:
“Judge Gilstrap rules that damages can be enhanced if SEPs subject to a FRAND commitment are willfully infringed (Core Wirless v. LG)”
“Judge Payne applies “important evidentiary principle” to preclude telling jury about end product price (Core Wireless v. LG)”
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=133767051
These articles are about LG’s loss to Core Wireless in a patent infringement case. They have nothing to do with IDCC or arbitration, so I don’t know why you appear to keep referring to that post
if you want to find out more about that case and the decision read the following press release
http://www.prnewswire.com/news-releases/jury-awards-core-wireless-a-006-per-unit-royalty-in-patent-litigation-against-lg-and-finds-willful-infringement-593776361.html
You seem to doubt that an arbitration award can cover something other than money. While in most instances arbitrations are about money awards, depending on what the dispute is about, non monetary awards can also be made. just Google “non monetary arbitration awards”
Why don’t you just admit that you are wrong in this instance
mickey: You go to arbitration to settle disputes. In this case LG initiated the arbitration by claiming in the ITC '800 case that under the expired license, that in addition to 2G, they still had a license covering IDCC's 3G patents; and therefore there was no infringement. IDCC fought against the arbitration request, but was forced into arbitration when the ITC judge in the '800 case agreed with LG.
mickey: What you posted are all (17) docket entries summarizing the actions taken by the court in regard to IDCC's request (petition) to confirm the LG arbitration award. The key entries are numbers 14 and 15 wherein the Judge confirmed the final award in its entirety.
mickey: The page you cited no longer loads. There was no monetary amount involved in the arbitration. A little later the site (law360) posted the following (corrected) information regarding the LG arbitration. Note the wording regarding a "noncash arbitration award".
CORRECTED: LG Won’t Contest Arbitration Award To Pa. Co. In Patent Row
By Vidya Kauri
Law360, New York (March 1, 2016, 12:37 PM EST) -- LG Electronics Inc. has agreed not to contest an arbitration tribunal’s decision that it does not have the right to arbitrate over an expired patent license with Pennsylvania-based InterDigital Communications Inc., according to an official from InterDigital Communications.
InterDigital’s spokesman Patrick Van de Wille told Law360 on Wednesday that a New York federal court’s confirmation of the noncash arbitration award on Sunday means that the parties can resume negotiations on the terms of a license and that those negotiations could include arbitration.
https://www.law360.com/articles/765446/corrected-lg-won-t-contest-arbitration-award-to-pa-co-in-patent-row
Paulee: While it no longer matters, I believe the statement that "It was then that things got a bit odd, as LG found itself arguing alongside the ITC’s general counsel at the high court, which eventually ruled that arbitration was indeed the proper venue for the fight." is not correct.
The Supreme Court did not rule on the merits of the case. While they granted LG's certiorari request, because IDCC had in the interim dismissed LG from the ITC case, the Court summarily ruled that the case was moot.
(ORDER LIST: 572 U. S.)
MONDAY, APRIL 21, 2014
CERTIORARI -- SUMMARY DISPOSITIONS
13-796 LG ELECTRONICS, INC., ET AL. V. INTERDIGITAL COMM, LLC, ET AL.
The petition for a writ of certiorari is granted. The judgment is vacated, and the case is remanded to the United States Court of Appeals for the Federal Circuit with instructions to dismiss the case as moot. See United States v. Munsingwear, Inc., 340 U. S. 36 (1950).
https://www.supremecourt.gov/orders/courtorders/042114zor_c0n2.pdf
mickey: An arbitration panel can issue a partial, or interim award, and then later issue a final award, This was the situation in the Huawei arbitration. In the LG arbitration only a final award was made.
mickey: Do you have any idea what you are posting about?
I believe there was only one arbitration. In that case the arbitrators rejected LG's claim that in addition to 2G they also had received a license to IDCC's 3G patents after the license expired. The award did not include any monetary amount to be paid IDCC by LG. It just allowed IDCC's patent infringement case against LG to continue
"On December 29, 2015, the arbitration tribunal issued its final award. Rejecting LG’s arguments, the arbitration tribunal found that LG’s license with respect to 3G products under the 2006 LG PLA had terminated as of December 31, 2010, at the expiration of the 2006 LG PLA’s five-year term, and that only LG’s paid-up license with respect to 2G-only products survived the expiration of the term."
As far as your comment about myself and FISH throwing in the towel, In the ITC "800 investigation it was IDCC who threw in the towel and requested that the "800 investigation against LG be terminated.
"On January 13, 2014, InterDigital filed a motion to terminate the 337-TA-800 investigation as to the LG Respondents. No opposition to InterDigital’s motion was filed. On February 12, 2014, the Commission granted InterDigital’s motion to terminate the investigation as to LG."
mickey: I don't have to tell IDCC what the contract meant since they did exactly what I said they could do by filing an infringement case after LG did not agree to a new agreement. However, since there was no subsequent court finding that LG had in fact infringed, as I also stated, there is no legal obligation for LG to pay IDCC anything.
While IDCC may have anticipated/expected/hoped (choose one) that LG would sign a new 3G license when the agreement expired there was nothing in the agreement that required LG to do so. Therefore, the following statements from your previous posts are just your erroneous, uniformed opinion that is not supported by any facts.
"In fact since LG reneged on their agreement"
"Total breach of contract in my opinion."
"They conspired to screw IDCC and breach their agreement."
"Therefore they defrauded IDCC by signing the 3G license in order to get a paid up 2G license."
FISH: As usual mickey's post are his non-factual opinion as to the way things happened or should have happened. Below is a short summary of the LG situation.
The LG agreement (i.e. contract) called for LG to pay IDCC $285 million. In turn, IDCC granted a license to LG allowing them to use IDCC’s 2G and 3G patents in their products for five years ending Dec 31, 2010, without being charged with infringement. In addition, if at the end of the five years LG had met all the license terms, they were given a fully paid up license for the 2G patents.
After the five year period, LG had no legal obligation to pay IDCC anything, and IDCC was free to sue them for infringement of its 3G patents.
After the license expired on Dec 31, 2010, and no new agreement was reached, in Oct 2011, IDCC filed an infringement action against LG with the ITC (‘800 investigation); and as usual also filed a companion District Court case. After various legal actions related to the ITC case, IDCC requested that the case be dismissed. As far as the companion District Court case, that case was immediately stayed and is still stayed, see my recent post:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=133347856&txt2find=LG
jjff: For those wondering about the reference to the Louis Vuitton case petition to the Supreme Court at the end of the post, it is and interesting suit about the parody exemption to trademark infringement. The Court has not yet decided as to whether it will accept the case.
http://hk.fashionnetwork.com/news/Louis-Vuitton-pitches-parody-bag-case-to-US-Supreme-Court,852476.html
https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/17-72.html
JohnSamuel: As I stated most of the subsidiaries apparently were established for legal purposes, not as operating companies.
The following comment from the last 10-Q indicates that revenues from the Hillcrest subsidiary are minimal:
"Current technology solutions revenue increased by $2.4 million primarily due to increased shipments by one of our technology solutions customers and the inclusion of revenue from Hillcrest Laboratories ("Hillcrest")."
In addition to the listed subsidiaries, Convida Wireless is a joint venture with Sony. Based on the following from the last 10-Q, Convida Wireless operated at a loss.
"Convida Wireless is a variable interest entity. Based on our provision of research and platform development services to Convida Wireless, we have determined that we remain the primary beneficiary for accounting purposes and will continue to consolidate Convida Wireless. For both the three months ended June 30, 2017 and 2016, we have allocated approximately $1.0 million of Convida Wireless's net loss to noncontrolling interests held by other parties. For both the six months ended June 30, 2017 and 2016, we have allocated approximately $1.9 million of Convida Wireless's net loss to noncontrolling interests held by other parties."
JohbSamuel: That is an old list. IDCC as of 12/31/2016 now lists 30 subsidiaries. Most appear to be set up for legal purposes rather than as actual operating companies.
https://www.sec.gov/Archives/edgar/data/1405495/000140549517000005/ex21_subsidiarylist.htm
mickey: Apple just recently settled various litigations with Nokia and paid for a license. Microsoft paid for their license with Nokia 3 years ago as part of the purchase agreement,
From Nokia's latest annual report:
"Devices & Services business
We sold substantially all of our Devices & Services business to Microsoft in a transaction that was completed on April 25, 2014 (the “Sale of the D&S Business”). We granted Microsoft a ten-year non-exclusive license to our patents and patent applications. The announced purchase price of the transaction was EUR 5.44 billion, of which EUR 3.79 billion related to the purchase of substantially all of the Devices & Services business, and EUR 1.65 billion to the ten-year mutual patent license agreement and the option to extend this agreement into perpetuity. Of the Devices & Services-related assets, our former CTO organization and our patent portfolio remained within the Nokia Group, and are now part of the Nokia Technologies business group."
mickey: Microsoft is not entitled to any monies received by Nokia when Nokia licenses their patents.
When Nokia sold their Devices and Services business to Microsoft, Nokia kept their patent portfolio. As part of the deal Microsoft was granted a 10 year non exclusive license to Nokia's patents, with an option to extend the license agreement into perpetuity. Microsoft paid Nokia EUR 1.65 billion for the license and option and is just another licensee as relates to Nokia's patents.
mickey: As an investor in IDCC, it is natural that you want to receive detailed information as to what is happening. The problem is that in making information public as to what was negotiated with one company can hurt the company in negotiations with other companies. In this particular instance it appears that as part of an overall settlement IDCC agreed to accept a relatively small amount to cover past sales. However, since the period covered by this amount was not disclosed there is no way to determine what the effective unit rate was for past sales amount. Although circumstances vary for each potential licensee, when negotiating with IDCC they would like to know the settlement’s effective rate, especially since it appears IDCC’s recovery for past sales from Microsoft/Nokia was low.
IMO, IDCC did fine in collecting anything for past sales. IDCC has failed to win any of it’s past infringement cases against Nokia at the ITC, and was at the brink of having it’s one active case against Microsoft/Nokia, dismissed in the Delaware District Court after CAFC essentially ruled in favor of the USPTO’s unpatentability decision for the ‘244 patent. On the other hand Microsoft’s Sherman Act proceedings in the Delaware District Court was still going strong. These type of cases are hard to predict, and a loss by IDCC would have been devastating, so the dropping of this case was a benefit for IDCC.
loophole: Well stated, I have long argued about the supposed $3 billion owed by Microsoft/ Nokia.
As usual IDCC’s settlement announcement leaves many unanswered question, one of which is the period covered by the limited release of past sales.
“Pursuant to the Settlement Agreement, in exchange for cash and other commitments from Microsoft, InterDigital has agreed to a limited release on the past sales of certain Microsoft products, including Nokia terminal units sold during a limited period of time. InterDigital and Microsoft also have agreed to terms for dismissal by them and Nokia Corporation of all outstanding litigation……”
What we know from the 2nd qtr 10-Q is that as part of the agreement Microsoft paid paid IDCC approximately $46 million for past sales.
(“The $59.9 million increase in total revenue was primarily driven by the increase in past patent royalties of $46.6 million primarily due to the Microsoft Settlement Agreement signed during second quarter 2017.”)
Since all current litigation between the parties was dismissed, any legal attempt to collect for past infringement would require the filing on new cases. Since damages for past infringement is limited to the six years prior to the filing of the complaint, even if the settlement period is limited and new cases were filed immediately (which I doubt), damages at most would be limited to Microsoft/Nokia production since mid 2011. In that regard the following cite has a chart showing Microsoft/Nokia’s quarterly mobile phone sales from 2010 thru 1st qtr 2016. As can be seen there was a very significant drop in mobile phone sales from over 100 million units per quarter to approximately 20 million units.
http://www.businessinsider.com/nokia-mobile-phone-sales-by-year-2016-5
mister: I disagree. Since most already own a significant number of shares, and/or have pending awards to be vested, like any other holder the higher the stock price the better for them.
mickey: According to the proxy statement, it appears that depending on the stock price when the award is made the answer is YES to your question " is the lower the stock price is the more shares the management receives free?".
"usage could be substantially different from our forecasted Share usage if our stock price on the date the award is granted is significantly different from the stock price assumed in the forecast (which was $84). For example, if our stock price on the date the award is granted is lower than the stock price assumed in the forecast (which was $84), we would need a larger number of Shares than the number projected by the forecast in order to deliver the same value to participants."
Gamco: Apparently Nokia has a much better licensing team than IDCC and/or a much better patent portfolio.
From Nokia's March 20-F annual report:
"Intellectual property rights litigation
Apple
On December 21, 2016 , the Group commenced patent infringement proceedings against Apple in Asia, Europe and the United States. Across actions in 11 countries, more than 50 Nokia patents are now in suit, covering a range of technologies, such as display, user interface, software, antenna, chipsets and video coding as well as 3G and 4G cellular standards. Schedules for the various actions are yet to be set.
LG Electronics
In 2015, LG Electronics agreed to take a royalty-bearing smartphone patent license from Nokia Technologies. The detailed royalty payment obligations are subject to arbitration, which is expected to conclude by the end of 2018. Terms of the agreement are confidential.
bulldzr: The use of TV white space is a subject that has been under study by the Government and industry (including IDCC) for many years. I have no idea as to whether IDCC has been, or will be working with Microsoft in this area. Below are some cites that can provide further background information.
FCC
https://www.fcc.gov/general/white-space
IDCC
http://www.interdigital.com/all_results?search_query=white+space&search_button=Search
Microsoft
https://www.microsoft.com/en-us/research/project/dynamic-spectrum-and-tv-white-spaces/
my3sons: the reference to LG is in regard to the inactive case I previously posted about:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=133154721
The case was initiated as a companion caae to the ITC 800 investigation. The defendants were Nokia, Huawei, ZTE and LG. As a companion case to the ITC investigation, it was automatically stayed, and is still in that status. Because of settlements Nokia and Huawei were dropped from the case, but ZTE and LG remain. The following is IDCC's latest status report to the court on the case:
Dear Judge Andrews:
The parties to the above-captioned matter (“the 654 Action”) were directed to and did previously file a status report on March 13, 2017 (D.I. 97) in response to the Court’s Oral Order of December 13, 2016 (D.I. 96). In the status report, InterDigital requested, and Defendants did not oppose, that the current stay be maintained to allow the parties to continue to confer, without unnecessarily occupying Court or litigant time or attention in the interim. The Court most recently continued the stay through and including June 11, 2017. (D.I. 98).
As a result of a settlement, on May 15, 2017, InterDigital and the Nokia Defendants submitted a Stipulation of Dismissal with respect to the Nokia Defendants (D.I. 99), which this Court entered on May 16, 2017 (D.I. 100).
The remaining parties continue to confer, and for these reasons, InterDigital respectfully requests a continuation of the stay for another 90 days, until September 11, 2017. Although the remaining Defendants (ZTE Corporation, ZTE (USA) Inc., LG Electronics, Inc., LG Electronics USA, Inc., and LG Electronics MobileComm USA, Inc.) (“Defendants”) continue to be of the view that the case should be dismissed, Defendants do not oppose InterDigital’s request for an additional extension of the stay up through and including September 11, 2017. The parties will provide a further status report by September 11, 2017.
Respectfully,
JohnSamuel: I guess they can cover themselves by their note that "Note: Unless otherwise mentioned the reporting date is 06/30/2017.", and all the listed report dates were 3/31.
JohnSamuel: A misleading report. While the introduction states the data is for the quarter ending 30 June, as noted in the listing the information was based on reports dated Mar 31.
Actual information for the quarter ending 30 Jun is not due to be reported until 15 Aug.