Jim
Regarding the Samsung matter, the arbitrators ruled that Samsung had to abide by the original license rate until 1999. They further found that Samsung did not have any rate for 1999, 2000 and 2001. They determined that the obligation to resume paying royalty would begin 1/1/2002 and that the rate would be determined in the same manner as Nok. The rate will be substantially lower than the rate in the original license.
Samsung does have some prepaid royalty remaining which will be applied under the new rate.
Samsung is in a catbird seat awaiting the result of Nok since they have no rate obligation until Nok sets one..
Nok was clever enough to extract a warranty from IDCC that it would continue the litigation with Ericy. We do not know if Nok was contacted regarding the dismissal of the action or if they were even entitled to such notice of such intention. The SEC filings of the Nok contracts were incomplete on this issue.
I have posted before that none of the early licenses were uniform because of incentives to employees based on the front money collected at the time. Thus, they were naturally more lenient with the potential licensees regarding escape clauses and MFL provisions. They learned a lesson in the Samsung arbitration that should carry over to 3g if, as and when the industry decides to license their IPR.
Nok more than likely has some contractual language interpretation arguments which may or may not be valid. Do not be confused with statements regarding valid and binding contracts. Anyone with a signed written agreement can make the same claim. IDCC naturally takes this position. Contracts with matters to be filled in at a later date are always subject to interpretation regarding the language that attempts to explain the procedures for doing same.
It appears that Nok agreed not to challenge the patents of IDCC so long as they maintained the action against Ericy regarding these patents. Thus, the warranty to litigate was included. As you know, some of the Ericy and Ericy/Sony license language is omitted also. Some of that language contained a patent list which we can assume was accompanied by an admission as to validity and their presence in the technology under license. I am of the opinion that this would serve as a judicial admission and the license probably contains language that prevents Ericy and Sony from further challenges to the subject patents. I believe that Nok has no challenge based on IPR.
The only gray area would be the manner in which Ericy and Sony determined the rate contained in their license. Unless Nok can show a real departure from the habit and custom of the industry in determining the rate, I feel they are out of luck in this respect also.
Thus, it boils down to the EU nibble which we have all discovered is a way of life in the wireless world. Nok has been very successful in its dealings and is making the attempt again. I have posted before that IDCC will fight as hard as Sharp will let them. If Sharp renews, this is around 25 mil minimum a year cash flow for PHS and could be significant since China is allowing this technology without requiring a license from the government. It is being used in all of its provinces and the demand for product is high. Further, IDCC included this technology in the Sony/Ericy license for the benefit of notice to Sharp.
You believe it is a done deal and I hope you are correct. The past events have made me a little more cautious, but an announcement that Sharp has rejoined the fold would sure make this old long very happy.
MO
loop
AI
