InterDigital Inc (IDCC)

[rmarchma]

Loop re 2G UK suit being material you said:

..."With respect to the 2g UK challenge, IDCC certainly agrees with you as evidenced by their failure to file any SEC filings related to same. I remain somewhat baffled by this development because the IPR challenge by the biggest OEM in the sector as a purported licensee meets my criteria of materiality."

I considered this to be a material event also. I talked with IR a couple of weeks ago about this very point. Janet said that IDCC did not consider the 2G UK lawsuit to be material for the following three reasons:

(1) IDCC incurs patent opposition in the normal course of business, (2) the UK suit only involved three patents and IDCC had many more 2G patents, (3) the UK suit did not cause any delays to the arbitration.

I still think one could make the argument that this UK lawsuit was material. I feel that IDCC needs to err on the side of more public disclosures, when in doubt. I have formally made recommendations to that affect to the BoD in a recent email as follows:

"IDCC needs better public disclosures in order to be more open, honest, and forthright with the outside shareholders and investment community."

I even suggested putting out more detailed information on its 3G patent portfolio as follows:

"In light of these accusations by Nokia, I would suggest that you might consider providing greater detailed information regarding what IDCC considers to be its essential 3G IPR. That information is certainly compiled and provided to potential licensees, but I think it needs to be publicly disseminated. Vague references to contributions to standards, and general claims to having essential patents in all cellular standards, are just not enough anymore since the Nokia’s lawsuits.

On a prior Conference Call, wireless analyst Bucher was surprised that IDCC was claiming essential patents for CDMA2000 and asked if IDCC might put out a "white paper" detailing its essential patents. I think the reply was that IDCC would check into possibly doing something like that. However, IDCC never put out a white paper on its essential IPR. In addition to existing 3G licenses, I think IDCC's case for 3G essentiality could be made even stronger with a detailed white paper. This white paper would be even more effective if prepared by or attested to by an expert wireless consulting agency, such as PA Consulting."

IR's answer to that suggestion was as follows:

Janet said that a "white paper" might somehow inadvertently restrict a patent if too much is specifically disclosed about the patents. Instead IDCC declares what it believes to be its essential patents to the regional standards bodies.