Power brokers and true intentions--
Beginning with Nokia's decision to go to arb this past July, I have felt that the true intent of their prior agreements with IDCC were becoming obvious. (Recently others have eloquently posted similar thoughts here.) Now comes the revealing admission in a Texas court by Nokia's attorney that they never anticipated an IDCC win, at any level, in the Ericsson matter--that they therefor never intended to pay IDCC a dime for their 2G IPR.
This also obviously brings into question their intentions toward IDCC in 3G, as well, along with Nokia's interpretation of various "triggers."
Many of us over the past few years took offense at the malicious, contemptuous assertions of the retired fisherman regarding our chosen investment. Every move, every effort of IDCC was subject to the most distorted, worst-case scenarios imaginable in his mind. And yet at the root of these comments and pronouncements was his stated belief that IDCC's joint TDD venture with Nokia was nothing more than an engineering contract, that Nokia had cleverly hired IDCC to develop TDD for them, for their free use ad infinitum. To the fisherman, any attempt by IDCC to be paid for their 2G or 3G patented inventions was to be ridiculed and scorned--and dismissed.
Hmmph. As it turns out, behind the scenes this was also exactly Nokia's position.
Ericsson's place in this power struggle was at one time very similar, minus the contract to develop 3G IPR. Fortunately for us, that has changed. Changed? They felt forced to settle for 2G, but apparently there is no such impetus yet to settle for 3G IPR.
Perhaps there is a lesson for us as investors who have always thought, and believed, that right will ultimately win out and that wrongs such as the Motorola debacle will somehow, in some alternate way, be corrected. It seems that others, at the highest corporate levels, hold a very different view, one based on sheer power borne of very deep pockets and the consequential ability to wait forever as they manipulate the legal system to win their way. Honesty and fair play has never entered into it. And, in the failure of some small companies to collect on their IPR, it would seem that the advisability of this more heinous position has been validated.
Fortunately for us, IDCC has now won enough legal battles, and licensed with enough companies, to operate from an enviable position of financial and legal strength. However, as we go forward from this point, it would be wise for each of us to consider exactly what the corporate power and stalling tactics of others can/will do to our investment, and to resist any tendencies to anticipate best-case results. In 2G, Nokia and its legal representatives will continue to employ whatever delaying tactics and whatever IPR attacks they can until such time as they, like Ericsson before them, decide that the legal system will ultimately make it more expensive to stall than to settle.
Hopefully, such an approach will gift us with pleasant surprises, instead of our being saddled with a shortfall in our expectations--the situation to which we have become all too accustomed.
The assurances in the latest CC of more licensees by the end of the year should be met with a healthy skepticism, IMO, until it is proven. Some such projections by management have been borne out, while others have been ignored and eventually disavowed. ( Remember the business plan targets of timely additional licensees and of a second strategic partner? And what of the heady, stated implications of last spring with the Ericsson settlement?) Let the proof be in the announcement of signed, royalty-bearing agreements, I say.
3G poses more such challenges to the licensing efforts of IDCC, and past experiences should tell us, and IDCC, that success will come only from a position of power and strength, where the penalties for failing to license outweigh the cost of the license itself. (I believe that, per HG comments, IDCC is indeed fully aware of this singular path to success.) Fortunately, a soon-to-be well-stocked IDCC war chest from 2G may make that possible. And let us then be the recipients of wonderful upside surprises.
I leave it to those on this board with the legal credentials to walk us through our own discovery in these matters; for me to comment further would no doubt expose the limits of my understanding.
Isn't it curiious to note the change in discussions on Jim's various boards over the last few years, as we transitioned from primarily an in-depth discussion of telecom technology, and of IDCC's place in that technological world, to a much greater emphasis on the nuances of the legal battles accompanied by an acknowledgement of the huge, overriding effect they have on our investment? (And, no, I am not forgetting the MOT matter.) A few years ago we were lucky to have one or two lawyers participating on the boards, while now we need every one of the half-dozen or so who contribute on a regular basis.
Which reminds me: my own thanks to our Texas contingent and their thorough reporting, and very knowledgeable analysis of events. We are all in your debt.
Lastly, best wishes to all, with my hopes that your Turkey Day was most enjoyable.
peace,
dagrinch
AI
