Proposed Questions for the March Conference Call:
1. Does IDCC have “essential“ patents in HSDPA technology applicable to the FDD mode of 3G? Does IDCC have “essential” IPR in HSDPA applicable to the TDD mode of 3G?
2. Why did IDCC only include some of the Tantivy CDMA2000 patents in the lawsuit with Lucent, and none of the IDCC-developed CDMA2000 patents? Hasn’t IDCC developed essential CDMA2000 patents also, and wouldn’t some of these essential patents strengthen our case against Lucent even further?
3. Why did IDCC not include any WCDMA patents in its lawsuit against Lucent, as Lucent is now manufacturing WCDMA infrastructure, as well as CDMA2000 infrastructure? Is Lucent a named automatic trigger for the Nokia contract as to 2G and 3G infrastructure royalty rates?
4. Why hasn’t IDCC litigated against a major CDMA2000 handset infringer, when well over 60 million of these handsets have been sold over a three-year period thus far? Why litigate over CDMA2000 infrastructure, when the royalty for infrastructure is probably not nearly as much as the possible handset royalty?
5. In light of the significant increase in worldwide 3G system deployments and the fact that IDCC strongly claims to have essential patents in all modes of the 3G standards, isn’t it reasonable to expect to see some significant 3G licensing activity by IDCC this year?
6. Is the Nokia/Samsung arbitration adversely affecting both 2G and 3G licensing efforts of IDCC? Does IDCC still anticipate being able to get a new significant royalty-producing 2G or 3G license before Nokia/Samsung is resolved?
7. What is the current status of the Nokia/Samsung arbitration? Has the arbitration panel decided upon the scope of the arbitration and provided an official schedule yet? Do we still anticipate that the arbitration should be concluded in about one year from the date of Nokia’s original filing for arbitration? Has the arbitration panel indicated whether or not they would seek access to the sealed court documents?
8. Has Nokia and Samsung forfeited their rights to prepaid discounts by entering arbitration? Are there any other financial incentives, such as penalties or interest, for Nokia and Samsung to settle rather than continuing the arbitration process? Does a weaker dollar against the euro provide Nokia with added incentive to delay settlement and royalty payments as long as possible?
9. Is the 3G indemnifier referred to in the latest 10K, offering to indemnify equipment manufacturers against certain specific 3G patents of IDCC, or are they offering to indemnify against an entire 3G standard mode, such as CDMA2000 and/or WCDMA? Does the possible indemnification pertain to all equipment manufacturers licensed by the indemnifier, or only to a limited number of specific manufacturers?
10. What measures are being taken to mitigate the possible adverse impact of the indemnifier on our licensing efforts? Does the Lucent litigation have anything to do with or any connection to the indemnifier issue?
11. Does IDCC anticipate allowing piecemeal 3G licensing, or does a licensee have to license for all the 3G modes, including CDMA2000? Will IDCC grant a 3G license to a particular manufacturer, if there are any unresolved 2G royalty issues with that manufacturer?
12. In the Matsushita infringement license agreement, have any of the specified “key” 3G patents been issued in Japan yet, and how many are still pending issuance? Can IDCC begin earning revenues from the Matsushita advance when just one of the specified 3G patents is approved by the JPO, or do we have to wait until all of the specified 3G patents are approved?
13. Do we have any existing Japanese licensees whose royalty obligations to us are affected by the Japan High Court appeal over three years ago on two of our 2G patents, which were ruled invalid by the JPO? Why have several of IDCC’s existing Japanese 2G licensees, who are currently manufacturing 3G products, not yet updated their licenses to include 3G?
14. How does the NEC/Siemens 3G infrastructure joint venture work in relation to royalty payments to IDCC? Is the joint venture paying the royalty, or is only NEC paying royalty on its share of the joint venture revenue and nothing from or for Siemens’ share of the JV revenue? How can NEC pay us royalty on 3G infrastructure and handsets and not Siemens?
15. IDCC has guided to a significant increase in operating expenses of 5% to 10% for the fourth quarter over the third quarter. Is the majority of this increase coming from director and officer liability insurance? What is the total quarterly or annualized cost for this insurance, and its justification? How much of IDCC’s quarterly or annualized operating expense is associated with the Tantivy asset purchase?
16. Does IDCC anticipate publishing specific measurable goals for 2004, or another formal Business Plan?
17. Does IDCC expect to enter into any new strategic partnerships or engineering services agreements within the foreseeable future? Are we having any strategic discussions with anyone about further developing TD-SCDMA for the Chinese market or about WTDD chips?
18. Does IDCC have essential and commercially important IPR in all of the various 802 standards, including 802.11, 802.16, and 802.20? Are we currently approaching any specific companies to license these standards? When do we expect to begin licensing the 802 standards, and will they be licensed separately from the other 2G/3G standards?
19. One of IDCC’s strongest 3G IPR positions is reported to be in the wideband and narrowband TDD modes. Are we in negotiations with IP Wireless and some other members of the TDD Coalition, who are currently producing standard-compliant TDD products, without an IDCC license?
20. Since IDCC has already publicly stated estimated Nokia and Samsung 2G royalty amounts in a press release and in 10K and 10Q SEC filings, shouldn’t IDCC disclose the 1999 Nokia contract and the 1996 Samsung contract according to SEC materiality rules? If not the entire Nokia contract, shouldn’t we at least disclose the section about Ericy being an automatic trigger for the Nokia royalty rate, due to its huge importance and the different interpretations of the automatic trigger clause between us and Nokia?
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