InterDigital Inc (IDCC)

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IDCC should take a lesson from Qualcomm (if it really does have essential IPR:

"A bunch of very nasty bullys is threatening our IDCC investment right now. We know who they are. We know they do not want to pay. We know that they are attempting to change the rules on 3G IPR licensing after they got everything they needed."

I simply do not understand why IDCC doesn't just say "The rate is x percent. Pay now or it's going to cost you x percent plus court costs." That's what Qualcomm did with their CDMA IPR (the rate is around 4-5%) and no one is infringing (everyone is paying). If a manufacturer tried to pretend like they didn't need to pay, Qualcomm would start to prepare a suit. As far as I know, there has never been any significant infringement of Qualcomm's patents and they didn't need to draw up sneaky little lawyer contracts whereby the rate would be set in the future by another manufacturers contract. Nope. Qualcomm said the rate is x% and if we ever offer a more favorable contract to another manufacturer, then we will also offer it to you. Now sign on the dotted line before you sell your wares. That's how Qualcomm does it and, remember, Qualcomm was a small company in the 1990's also and that's how they did it then also. The fact that IDCC does not take such a straightforward approach indicates their IPR is fundamentally different from those who take an easier road to licensing their IPR.

Interdigital has been around much longer than Qualcomm and yet they are still playing lawyer games when it's time to sign up licensees. Many of you would like to blame it on poor management but I suggest to you that (like I have been saying for 4 years now) that their IPR is not nearly as strong as many claim. This includes claims by management that they "believe" their IPR is essential. The proof is in the licenses (or lack of them). So, you can continue to blame management and claim that poor management is costing IDCC billions of dollars or you can wake up and smell the roses and realize that IDCC is just a little "me too" company trying to squeeze maximum mileage out of very questionable IPR.

I can only fault management for two things:

Excessive compensation and helping create a disconnect between investors expectations and reality. Other than that I think they do a fine job of maximizing the value of their IPR. It's a dirty job and no one has to do it (to the extreme extent they do) but I imagine the greedy little bastards thought it was better than working in a "regular" corporation.

My analysis of this situation has always made good sense but as time marches on it is becoming more and more obvious what is going on here. Don't get stuck with tunnel vision.

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