Arbitration is a big problem for the following reason:
Management led us to believe the terms of the Nokia contract were cut and dried. I have said all along that I didn't believe this, a license agreement without a royalty rate is no better than no license agreement at all. Now we find that the contract terms are sufficiently vague that IDCC and Nokia management both disagree on just what their agreement means. This is evidenced by the fact that they need to arbitrate. I would tend to believe Nokia.
Anything can happen in arbitration, why do you think it's no big deal? Plenty of boosters here shrug it off saying "Nokia just wants a better rate". I don't think that excuse holds water. Of course they want a better rate, no rate is better than a low rate and Nokia will get the lowest rate they can, if not zero.
Management has lost more credibility here by leading the boosters to believe Nokia was in the bag. My experience said otherwise. How can anyone trust management ever again after so many disappointments?
Personally, I think management is doing the best job they can with as little ammunition as they have. Problem is the disparity between what ammunition people think they have and what they actually have. This explains IDCC's "poor" performance all these years. Actually, they have done slightly better than I anticipated (revenue wise). I think management deserves credit for that. But, recent revenue may not continue. It seems management has a preference for license agreements that produce money right away but then fall apart when it comes to long-term revenue stream. This is consistent with my characterization of IDCC as a nuisance company. A company that has filed for patents surrounding wireless innovations. They use the ambiguity of these patents to try to leverage nuisance settlements out of manufacturers. Currently, they are trying to lever the weak Ericsson agreement into royalties that Nokia is calling them on. This is pattern and never ends up with solid long-term revenues, just enough to boost the share price when it's time for insiders to dump their free shares and to depress the price when it's time for more options to be issued.
Whatever happened to hitting that key 3G market window? I haven't heard much about IDCC's chip (ASIC) development efforts lately. How irresponsible of management to even pretend they were a player in the highly complex ASIC market!
Enough for now.
Once
The best way to convince a fool that he is wrong is to let him have his own way.
~ ~ ~ Josh Billings
