12bees, saw your question about what might take longer than 60 days to resolve before completing the payment conditions in IDCC's license agreement with Nokia. That is an important question worth talking about IMO. Will offer a couple of thoughts and hope that we get some helpful discussion going.
First, we do not know how that Nokia license agreement is structured, i.e., does the contract language require agreement on royalty rates for everything before it becomes effective, or does it allow agreement on 2G rates independently from the agreements on 3G rates? Good chance that InterDigital wanted to get out of the "pieces and parts" royalty rate licensing business when they negotiated that contract, and wrote it as a comprehensive set of tightly linked terms and conditions. Getting such an agreement completed would be a complex undertaking, but you would only have to do it one time.
If that is the case here, and I'm hoping that it is, then we could be "good to go" with Nokia for 2G based on the Ericsson agreement, and fully in agreement on most of the really important 3G rates, but still working through final clarifications with a few less significant issues. IMO that "indemnification" thing is one possible hangup, and determining IDCC license rates on the newer 802.1x "WiFi" stuff is another.
OK, suppose that is what we are waiting on. What's to worry about? Not much longer term IMO, but plenty if your bet is on the near term "Call" options or you are pushing hard on the margin leverage at this point. The longer we wait for confirmation of the Nokia revenues, the more doubts some folks are going to have, and that could weaken the market's enthusiasm for awhile. We are going to learn something for sure when InterDigital reports first qtr results in a few weeks. May 13, 2003 could turn out to be the day of reckoning for our IDCC shorts. On the other hand, seems like long term IDCC investors who are being prudent with the margin only have to worry about the possibility of waiting just a little bit longer.
