JAI
If you will reread the 8k filed by IDCC concerning the Samsung arbitration, you will find that the past royalty is laid out in very specific terms on the basis of the NOK RATE. The second paragraph is obviously an interpretation based on conclusions of the author. IDCC did not produce the actual ruling of the arbitration panel from which the investing public could draw their conclusions. The author concluded that "in accordance" means that Samsung has inherited the entire Nok license. Thus, we must assume that that term is used in the arbitration ruling.
You, Dish and Ronny throw around terms like "MFL rights" as if you practice contract law for a living. Samsung is the entity that asserted its MFL rights under its license with IDCC. These rights were created by IDCC in the license. IDCC contracted that it would not license with a subsequent licensee with terms that would create a commercial disadvantage for Samsung. In fact, IDCC was supposed to inform Samsung if such an event occurred. Whether or not IDCC informed Samsung of the Nok license is moot at this time. However, samsung asserted its rights in the arbitration and the panel agreed that they did indeed have such a right. The rights were asserted on the basis of the royalty rate. The panel modified the rate through the year 2001 and Samsung is to pay whatever rate and terms that Nok receives thereafter. The author of the 8k assumed that 1/1/2002 would be the starting point because of language in the Nok contract. However, IDCC also agreed to an MFL clause in the Nok contract and at the time of the 8k Ericy and Ericy/Sony were not licensed. Suddenly, Ericy and Ericy/Sony licensed with effective dates of 1/1/2003 with some reporting requirements for 2002. We do not know if the 2002 sales of Ericy/Sony created an additional liability because that portion of the license was not provided in the SEC filings. Nok does not have MFL rights with regard to Samsung, but Samsung has MFL rights down the chain of licensees.
The confusion sets in because the author made reference to a start date and to the licensing of certain OEM's because of a "reference" to the Nok license. IMO, the arbitration panel did not consider these matters at all. They agreed with Samsung that the rate contained in its license with IDCC should be modified on the basis of the Nok license. The panel made the modification for the period covered by the Nok front money and applied the Nok rate to the Samsung sales for said period. I believe that the panel ruled that Samsung would pay royalty thereafter at the rate and terms of Nok. I do not believe that the Panel envisioned a pass through regarding how the rates were to be set. I believe that the ruling was simplistic and that Samsung was bound to pay as Nok paid in the future. Just as Nok may be bound by Ericy and Ericy/Sony, Samsung is bound by Nok. If Nok somehow wins under some bizarre and incredible circumstance, then the win is passed through up the chain to Samsung.
The author further confuses the situation by stating that Samsung can agree to a rate. Well, of course Samsung could waive its MFL rights and agree prior to Nok setting a rate with IDCC. However, it has nothing to do with arbitration ruling that he was attempting to report to the SEC in the 8k.
IDCC has made its interpretation and charged at Samsung prior to setting a rate with NOK. Samsung is reacting in the only way that it can because of the position taken by IDCC. IDCC somehow believes that an MFL clause does not entitle Samsung to pay the same as Nok and is treating the parties as if they are separate and unrelated. The aggressive nature that many applaud would appear to be in direct conflict with the MFL case law that has developed over the years.
This is my final post on this subject. I can only say that if I was on the panel in the second Samsung arbitration, I would have to rule against IDCC despite my long held investment in IDCC. I have always called them as I see them.
MO
loop
News 
Market Data 
Discover 
AI
