A quarter BILLION is nice, but...
I don't see what we "won" here. If the board attorneys and common sense are correct, the $250 million from the arb was a near lock. So in exchange for not having to litigate another year or two we gave up interest on the award and any royalties on our 3G patents to date, and no longer have the trigger that got us our 2G revenues. Frankly to me it looks like IDCC blinked. We set a precedent for other infringers to not pay for 3G through today as well. The good news is that we should be able to collect additional 2G monies from others, starting with Sam, but 2G revenues will only affect current earnings and will not give us future earnings for a multiple. I believe that for IDCC to achieve its potential appreciation it must monetize its 3G patents. If we did not have LG signed I would be selling on this news because aside from LGs license we have no tangible indication of the value of IDCCs 3G patents. Right now NOK and that other company of integrity, ERICY have settled for 2G and agreed to negotiate for 3G. I am not optimistic about their commitment to negotiating a fair and reasonable rate.
Am I happy that my portfolio is up 20% today? Damn right I am. Do I think this is a watershed event? No more than the ERICY settlement was. I see no incentive for the other big OEMs to license. I'm hoping UB is close on some new 3G contracts because after 2006 IDCC's revenue stream is more like a creek. I want it to be the Mississippi.
My apologies for dwelling on the negative, but it just seems that everyone is popping the champagne corks and I don't see the same good news, so maybe someone can address my concerns above and let us curmudgeons get hyped up too.
Frank
