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Item 8.01. Other Events.
On September 6, 2007, InterDigital, Inc. companies InterDigital Corporation, Tantivy Communications, Inc., and IPR Licensing, Inc.(collectively, InterDigital)signed a worldwide, non-transferable, non-exclusive, fixed-fee royalty-bearing patent license agreement with Apple Inc. (Apple). Under the seven-year license agreement,effective June 29, 2007, InterDigital granted a license to Apple under InterDigital's patent portfolio
covering the current iPhone(TM) and certain future mobile phones, if any.
I do recall one of the analysts stating that the license covered 2G and 3G only. Based on the excerpt from the original 8K above, it looks like the license does not cover the iPad at all, whether 3G or 4G.
Looks like the WSJ spoke to someone at dealreporter too: http://blogs.wsj.com/deals/2011/09/26/interdigital-swoons-on-report-of-meek-deal-bids/?mod=yahoo_hs
"Citing one source familiar with the process, DealReporter said InterDigital has “taken in bids” in recent days that “in some cases” were between $1 billion and $2 billion."
Agreed paheka. I chose the word "incompetent" to describe the report, rather than "criminal" because unlike hedge funds who seem to be able to act with impunity, I'm just a small fish and did not want to open myself to a defamation claim... Either way, I truly believe he did me a favor by allowing me to pick up a few more shares on the cheap.
Exactly. All I know is that for every share sold today, there was a buyer- one of whom was ME.
Paheka:
My membership won't allow for private reply, but I must say that the report's substitution of the words "initial bids" for the word "deal" does not speak well for the "reporter's" competence. I doubt that we would have seen such a sell-off had the reporter written exactly what he was told and then verbally reiterated to you.
Nice try, but in order for that to make any sense, one would have to remove the "in the" before "$1B-$2B range..." AND get rid of the comma for that theory to hold any water. Unlike the substance, the "reporter" got the grammar correct IMO.
Then the "reporter" should clarify the clearly erroneous "report" and state that "initial bids have been made in the $1B-$2B range," rather than insinuating that there is reason to believe that a "deal for InterDigital could be in the $1B-$2B range..." MO
First, the alleged DOJ "investigation" that Sqingebob referenced was supposed to be looking into the published dealings between GOOG and IDCC, not the real investigation that is the subject of your link.
Second, a 30 second google search on IDCC's 4G LTE patent portfolio would have enlightened you to the FACT that IDCC's value in NOT a lot (alot is still not a word as far as I know)lower than nortel's.
Finally, MPartners has a fiduciary duty to their clients to disprove (not simply deny) FALSE rumors, when the facts are otherwise.
Only one reason to pass along unsubstantiated, unresearched FUD...
I thought that's what IDCC was attempting when they filed suit against NOK in Delaware and the ITC actions vs. NOK and SAM? At the time, these two OEMs represented better than 50% of the entire 3G market. SAM settled, LG signed and NOK got a gift. Now LG is holding out, SAM likely won't renew upon expiration, and we continue to wait on NOK decision. Does IDCC reluctance to sue the OEMs that represent the rest of 3G market rise to the level of "sucks?" Always respected your posts and still do, even if I don't agree with you. That said, it's all too easy to criticize from the outside looking in, especially when the curtains are usually closed...
Actually, you are correct that licensing is not the only way to get paid. Putting part or all of the company up for sale to the highest bidder is another way... As for your all-in litigation strategy for securing fair and reasonable licenses, we'll just have to agree to disagree. By no means do I believe management has done no wrong, and IMO to say management "sucks" belies a lack of understanding of "the new IP environment or landscape" and the "corporate culture and mindset" of the unlicensed OEMs.
Exactly
IDCC has filed suit against NOK, and went to the ITC against NOK and SAM... #s 1 & 2 in market share at the time. Not only is a litigation strategy expensive, but there are no guarantees (see Motorola circa 1999 and NOK ITC decision). I believe that we should see the NOK ITC ruling overturned by the CAFC, but I've been fooled before (see Batts ruling in IDCC v NOK). I'm sure olddog can confirm, but if my memory serves me, IDCC was spending in excess of $10 Mill/Quarter in attorney's fees while litigating against just 2, that's right 2, infringers. I can't imagine the management bashing every earnings period when all of IDCC's profit would have been eroded by legal expenses as a result of lawsuits against every unlicensed OEM under the sun. Unfortunately, licensing IS the only way IDCC gets paid. How they get the OEMs to license is unimportant to me as long as it is fair, and doesn't bankrupt the company in the process. Respectfully, 40+% of 3G (50% when LG was under license) is hardly a failure in light of today's climate in the wireless IP space, as well as IDCCs diminutive size in comparison to the bullies that they want to play with. IMO, IDCC took the only reasonable strategic course available at the time, which was to fight the 2 baddest bullies on the block and trust that the rest of the bullies would fall in line once NOK and SAM fell. Well, SAM settled and NOK got lucky when the ref stepped in sucker punched IDCC on NOK behalf. Now we await the results of the appeal. Fortunately, due to the foresight of management and the talent of IDCC engineers, 3G litigation may be made moot by our 4G assets. Imagine if this all came to play out after having spent hundreds of millions more in legal fees suing every OEM under the sun. I wonder what you would have to say about management then... Just sayin'
jmspaesq- Short of suing every OEM under the sun, I would love to know what your expectations of management were that lead to your conclusion that "they really SUCK at executing on their business plan." As a company that does not manufacture a product, IDCC does not have the luxury of entering into cross-licensing agreements with other OEMs as does AAPL, NOK, Samsung, etc that would allow IDCC to more easily monetize their patents. Bottom line is management is only as good as the OEMs willingness to dance. In light of the current climate of war among the titans of the wireless industry, it is a wonder that IDCC was able to garner 40+% of the 3G market, yet they accomplished that and then some. LG's failure to renew is indicative of the huge burden that management faced in "executing on their business plan," as you apparently expected they should. FWIW, I applaud management's stubbornness in resisting the signing of licenses at anything less than fair market value. Even if one assumes management's inability to get 100% of the 3G market licensed was a failure, I think that only tells part of the story. Hiring and keeping the wealth of talented engineers who developed the inventions that now make up the IDCC patent portfolio, securing seats on standards setting bodies and other wireless industry organizations, building relationships on Wall Street, and Tuesday's coup de gras make up the rest of the story, and IMO, those accomplishments do not suck.
Thanks MJ... Been lurking all along, just got fed up with the management bashing and other BS on the board.
Sure beats waiting on the CAFC and LG... Many thanks to Nortel
Just got a call from my broker. Says that AAPL now rumored to be interested in buying IDCC as well.
She is a joke. MO
Blah, blah, blah. Well said sunshine.
Loop, I hear ya. I acknowledge that with IDCC's long history of unfulfilled expectations, it can't be easy to maintain a high level of optimism as one's investment horizon gets closer and closer. I truly hope that for you and those who are similarly situated, that this tree bears some fruit sooner, rather than later.
JD
Hello all. Been a while since I've posted as I have been busy working on furthering a new career. I have been lurking however, and I remain long and strong. As I read the latest earnings report, I couldn't help but laugh. No, I did not laugh at the report itself. Rather, I laughed at the thought of the posts I am about to read over the next couple days. Same characters, same stories, same agendas, and last but not least, same ignorance. To those who can't read past "IDCC misses by $.12," I have only this to say: Half a BILLION in cash; NO DEBT; virtually every player except nok, mot, eric/sony-eric currently under license in the fastest growing market in tech; the best R&D team in the business (IMO); and continued year over year growth of our recurring revenue base. I could go on, but you get the idea. Do we have issues? Of course we do, just like every company on Wall Street has issues. Do I like the fact that we are getting raped by our legal team? Hell no. Do I question management's seeming inability to capitalize on our $500 Mill mountain of cash? Absolutely. And yes, nok is largely responsible for keeping us below the $65-$70/share that I believe IDCC is currently worth, and management's bumbling throughout that entire fiasco is beyond aggravating. Bottom line is that no matter how you slice it and dice it, I can't think of many better places in the market to have my money. If you are looking for a quick hit, or don't have the time to wait for IDCC's day in the sun, then this ain't the place for you. If you are looking for a solid company that is well positioned in a space that is growing by leaps and bounds, has a horde of cash and no debt, has the best profit margin in the business, and who's tech powers virtually every new wireless product on the market, IMHO, IDCC is as STRONG a BUY as you will ever find.
What's that you say? They missed by $.12 this Q? Oh, my bad. Please disregard the above dissertation. Don't know what I was thinking. Happy investing.
JD
Mickey: The UK ruling only means something to the extent that nokia is forced to license the patent declared essential by Pumphrey, via a court order. nokia has shown time and again that it is not willing to pay IDCC unless required to do so by a court of law or an arbitration panel. In the UK action, IDCC did not file a claim for damages resulting from the infringement of the patents at issue. Pumphrey's ruling explicitly did not address infringement, as it was a declaratory action only, regarding the essentiality of those patents before him. As of this date, IDCC has not filed an infringement action regarding these patents or their US equivalents, in any court of law or at the ITC. Mickey, I don't think that there is one individual in the entire industry that would argue that IDCC does not have at least one valid, essential patent that is practiced in nokia's 3G devices. That fact notwithstanding, nokia has steadfastly resisted signing on the dotted line, and IMO will continue to do so until they are so ordered by a judge, jury, or the ITC. The bottom line is the UK ruling is meaningless until and unless IDCC proves in court that nokia is infringing the "essential" patents that came out of that case. Mickey, I hope you will now let this issue rest once and for all.
JD
OT: Cramer should know all about the crooked tactics he spoke about, for he has been practicing illegal trading tactics for years (MO based on a read of "operation deep capture" - google it if you did not read it when posted by someone here). IMO, he is a criminal of the worst kind.
It was Scott indicating that it was possible, in reply to TC's query whether RIMM might be a 10% contributor "by early next year or in the 4Q."
dmiller: you said "Scott is dancing around TC's 10% Apple customer question. The easy answer (mine)is that the per unit agreement is not as much as some seem to think it is."
IMO, you are WRONG! At $1 per handset, APPL would have to sell 30 Mill units to reach the 10% threshold right now. They sold 7 Mill in this last Q and 7 Mill in the previous Q. As our revenues continue to increase, 10% get harder and harder to reach. Therefore, AAPL could be paying slightly higher than $1 a phone right now and still not be a 10% contributor. Not saying that AAPL is paying $1 per phone, but for you to imply that IDCC is getting a pittance from AAPL is typical dmiller FUD.
InterDigital® will host a conference call on Thursday, October 29, 2009 at 10:00 a.m. Eastern Time to discuss its third quarter 2009 performance and other company matters. For a live Internet webcast of the conference call, visit www.interdigital.com and click on the link to the Live Webcast on the homepage. The company encourages participants to take advantage of the Internet option.
For telephone access to the conference, call (888) 802-2225 within the U.S. or (913) 312-1254 from outside the U.S. Please call by 9:50 a.m. ET on October 29 and ask the operator for the InterDigital Financial Call.
Mickey, WM did not reveal anything new. He simply stated that which is obvious, to wit, that any license agreement, whether per unit or fixed, must account for the sales price of a handset to determine the amount of the royalty to be paid to a patent holder. As for why WM, why do you care? The likely answer is that IDCC had just been in the news with regard to the ITC case against nokia and could obviously offer some insight in the APPL v nokia smackdown. Any exposure for IDCC at this point can't hurt, so just relax and hope we get some good news this afternoon.
For those who want to play the blame game and crucify management for choosing the patents at issue here, or our engineers who reverse engineered nokia's products, please consider that nokia has not alleged, nor has the Staff, ALJ or the Commission concluded, that nokia is not practicing these patents. IDCC lost because they could not prove that the use of these inventions did not infringe the patents as construed by the ALJ. So, IDCC correctly chose what have been determined to be 4 valid and enforceable patents, that have undeniably been employed by nokia to make their handsets work. What IDCC could not anticipate was the inexplicably narrow construction of said patents by the ALJ. IMO, this will be rectified via appeal or the prosecution of the newly issued, unequivocally constructed continuation patents, and nokia will be made to pay up. Once again, IDCC has been dealt a blow that will cause further delay, but this travesty has in no way damaged my confidence in this management team to get the job done.
Long & strong
JD
No dmiller? By far the most altruistic poster on this board. Who else works as hard to protect us from ourselves?
"Only thing that will move this stock is signing the big guns and less litigation...period."
Brilliant observation by the glenn beck of this board. MO
armwonderful: I do not disagree with you, and in spite of WM numerous statements about how IDCC is not all about nokia, our share price thinks it is. Further, we are licensing new companies at a pace more akin to plate tectonics. Where is the ericsson license after all these years with a "framework in place?" DO you not think nokia has something to do with that? Where are the licenses with motorola, ZTE, palm, etc, etc, etc? If it's not about nokia, then show us why it's not. At some point words begin to ring hollow. MO
garycoal: Of course we can only speculate on the ALJ's reasoning at this point. But that he ruled "no infringement" is not up for speculation. I don't know if I would characterize the ALJ's comments that the case is about validity as a "misdirection," as I don't think he stated that as a validity vs. infringement scenario. I don't recall the context in which he made the comment, though I'm sure Revlis can enlighten us.
Mickey: It's nice to see that you are finally understanding that this case is as much about nokia's intentions as whether or not IDCC has the goods. It has been mentioned countless times on this board how easy it would be for nokia to pay IDCC a measly $1, $1.50, or even $2 per phone, and pass it on the the consumer. IMO, this is not about a rate in nokia's mind. This is about nokia trying to beat IDCC into the ground. IDCC has been chasing the carrot on nokia's stick for far too long IMO. I think the hiring of new counsel is an indication that they are finally realizing this as well. MO
Gatticaa: I will offer no comments on your question about affirmative defenses on the infringement issue as I have not read them in quite some time. However, as to the first part of your question, I think you're right on. Revlis informed us at the beginning of the ITC hearing that Luckern made it clear that this case was about VALIDITY. With that, it makes sense that the IDCC legal team spent the majority of the limited time allotted for arguments on the issue of validity. As a result, the infringement issue was practically an afterthought. I can not necessarily fault IDCC counsel, as I'm sure they thought that if they proved validity, infringement was a lock and a ban would issue. In my practice, I have learned the hard way, that in litigation, it is very dangerous to take any one element of a claim for granted. I don't think it's a stretch to conclude that IDCC's legal team just learned the same lesson. MO
M3S: If IDCC, as I have, has concluded that nokia has no intention of settling on a number that works for IDCC, and that even a ban will not induce nokia to sign an agreement, IDCC will absolutely abandon the ITC and proceed in Delaware or less likely, Texas. MO
Olddog: I'm not talking about products that would incorporate nokia 3G phones in a larger product. I'm talking about products made by another OEM for nokia, that may practice the IDCC patents at issue.
IDoCare: Yes, it sounds stupid for nokia to allow a ban for 2 years while waiting for the Delaware case to come to an end. However, nokia cannot be accused of playing it smart when it comes the the US market so far. Who knows what their strategy is at this point. One thing that seems to have been overlooked in the ITC proceedings is that IDCC has not sought to ban "downstream" products practicing the patents at issue. How nokia can make that work for them is anyone's guess, but I think it's worth noting.
Sonic: I truly hope I'm wrong, and nokia's actions to date seem to indicate that they are not interested in settling with IDCC. After all, the only time they've settled anything with IDCC is after the District Court upheld our 2G arbitration award. I don't expect nokia to suddenly become a company of integrity. MO
Mickey: that nokia went to and ID by the ALJ tells me that they are not sweating bullets. They went to the ID in the face your unequivocal belief that a ban was going to issue. I would love to be wrong, but I truly believe that nokia is willing to wait until the case is sent to a jury in Delaware, as even with a ban, they are going to get a rate that is far less than what they maintain an essential patent is worth. This is just my opinion and it is based solely on the fact that every action that they have taken since they refused to honor the original 3G agreement 6 years ago, points toward a desire to rid the wireless industry of another potential monster like QCOM, namely IDCC. All the prognostication and cheer-leading you want to do will not change the fact that either IDCC is going to accept what nokia wants to pay, or at the earliest, we wait until the Commission rules in December. IMO, the most likely scenario is we wait until the jury gets the case in Delaware. On the day any one of those 3 things happen, IDCC will begin the journey to wherever she's meant to go. nokia can afford to make IDCC wait to begin their journey for as long as it takes. All IMHO
Mickey: Yeah, I think I have a clue. I don't think you have a clue what I'm suggesting. I believe in IDCC as much as you. I have put my money where my mouth is for 9 plus years. Every post I've ever made says as much. The only difference between me and you is I know how to spell, I know how to write, and I don't post just to "hear myself talk." The cost of time to IDCC is huge whether you understand why or not. nokia has shown a willingness to hold out until they are made to pay. Even a ban does not force them to pay. Only a judgment in a court of law will make nokia pay. I do not want IDCC to cave, and I don't think nokia intends on paying what IDCC wants, ban or not, voluntarily. I won't explain why here, but I have a pretty good idea how nokia gets around a ban anyway. IMO, the Delaware case never should have been abandoned in favor of the ITC. If IDCC is to ever earn the respect of nokia and the rest of the infringers, they must have their patents validated in court. Period. Absent that, we will always be negotiating from a weak position, no matter how many millions are in the war chest. Sure a loss would be devastating, but a win ends this crap once and for all. Only then will IDCC attain the market cap that you and I know they deserve. All a win at the ITC gives us is increased bargaining power. That's great, but nokia has bargaining power as well, and though diminished, it's still formidable enough that IDCC will never get anywhere near what nokia's own expert believes 1 essential patent is worth. A judgment removes all bargaining power from nokia and IDCC will be rewarded beyond your dreams. IDCC should tell nokia to take their offers and stick'em up ericsson's ass, and go get a judgment, good or bad. Like you said, they're only 1 customer and we have lots of $$$$ coming from existing licensees to keep us going even if we lose. MO
Rev: There is no value outside of the ITC of luckern's finding of validity. There is only value to the extent that nokia or anyone else signs on the dotted line. MO