Loop.
The point I am slowely getting to is as follows.
I am putting on my Nokia commercial hat and looking at the situation from their point of view.
The 1999 agreement.
1. An agreed trigger mechanism has in the opinion of IDCC been activated.
2. We can enter negotiations for a period of 120 days without making any committements.
3. After the 120 days we can either agree a rate or head for arbitration.
If we follow the above path, we are put in the following position.
a. We pay IDCC nothing for a minimum period of 16 months.
b. We get to use $300 million.
c. We can attempt to dirty the water by asserting that the trigger has not operated correctly, thus gaining another 6 to 12 months or perhaps longer through long term litigation, etc.
d. The longer we wait the more pressure we can assert on IDCC and obtain a much nicer 2g/3g license rate.
e. If we fail we still get the large discount.
f. We are currently using their patents 2g to 3g inclusive for nothing and earning substantial profits from them.
g. If we eventually have to pay for the IPR no interest or penalties of any kind exist, therefore we essentially will be able to make use of the funds that we would have had to pay to them and in addition when we do come to pay them it will be with a fixed dollar amount which takes no cognisance of the time value of cash.
Assuming that the above is the approach Nokia has taken, then the prospect of a large up front discount acts the opposite way to what one would hope for.
If the above is true the insiders of IDCC were aware of the above information from the 1999 agreement, therefore it would have been reasonable for them to assume that it did not make commercial sense for Nokia to come to an agreement rather than go for arbitration.
On the other hand if as a result of heading into arbitration then Nokia definately will not be able to avail of any discounts, prior to the setting of a rate, the above does not have any basis, if on the other hand it is true, then I would question the insider trades since the announcement of the ericy settlement.
AMS
