Corp-Buyer: I am confused about your statements regarding possible problems with the phase 2 starting date. The conference call at the time of the Ericsson settlement mentioned that they expect to receive approximately $34 million related to sales of terminal and infrastructure products through December 31, 2002, and then payments for the subsequent period. However when you look at the license terms, they are very explicit in breaking down the prior period payment amount into payments for the periods on and before December 31, 2002 and for calender year 2002.
Ericsson (infrastructure):
a. On or before 31 Dec 2001
(1) Lump sum non refundable payment ($ amount redacted)
b. CY 2002:
(1) Lump sum non refundable payment ($ amount redacted)
Sony/Ericsson (mobile phones)
a. On or before 31 Dec 2001:
(1) Lump sum non refundable payment ($ amount redacted)
b. CY 2002
(1) Calculated - based on units sold x specific royalty rates (rates redacted)
In addition to the cash payments, the Ericsson license assigns a value (amount redacted) for the EMP option.
I am sure this breakdown was done with the Nokia license terms in mind. Since we believe that the licenses triggered Nokia’s obligations, one of Nokia’s main concerns was to ensure that the payment terms in the licenses were not structured in such a manner as to possibly favor Ericsson/Sony-Ericsson to their disadvantage.
You are constantly berating IDCCs management for not working out a settlement with Nokia. However, as Nokia’s intention was apparently not to pay anything to IDCC, it is quite probable that Nokia’s settlement terms at the time of the Ericsson settlement were not worth the paper they were written on. Although that might have been then, now that Nokia has seen how the arbitration has been going, they may be more amiable to a reasonable setlement that would be considerd a win-win for both parties.
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