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Dave Davis

11/07/03 11:03 PM

#47929 RE: Ghors #47928

Greg:

Here are some question I have:

Was it possible for InterDigital to agree in writing that there was consideration, when in fact there was not?

Did InterDigital's acknowledgement validate the existence of consideration?

did Federal's discontinuation of its assertions of any rights they may or may not have had in and of itself provide a benefit to InterDigital and therefore be construed as consideration?

In my layman's opinion, paragraphs 38 and 39 are key.

Dave

The Reimbursement Agreement states that "the consideration for this
Agreement is the reciprocal trade off, and/or compromise, of their [InterDigital and
Federal's] respective rights which have been reserved and/or asserted with regard to
funding, allocation, apportionment and reimbursement of litigation expenses with regard
to the Combined Lawsuits [the Ericsson litigation] and, further, the certainty that is
derived from such agreement."
39. However, under the Reimbursement Agreement Federal did not give
up or compromise any of its rights with regard to funding, allocation, apportionment and
reimbursement of litigation expenses, and InterDigital did not receive any benefit in this
regard. Rather, under the Reimbursement Agreement Federal only promised to do a part
of what it had a pre-existing legal duty to do pursuant to the Policy: continue to provide

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texb

11/08/03 2:24 PM

#47946 RE: Ghors #47928

Ghors, PA tort reform is several years off...

according to the following excerpt from an American Tort Reform Association report:

Pennsylvania

On June 10, 2003, a constitutional amendment, H.B. 1326, that would enable the General Assembly to cap non-economic damages, passed the House by a vote of 119-76. If approved by the Senate, the measure would have to be voted upon and passed again next year by the General Assembly as the Pennsylvania Constitution specifies that a constitutional amendment must be
passed by the General Assembly in two consecutive sessions before it can go before the voters on a statewide ballot. If the Senate passes H.B. 1326 this year, and if the bill again passes the General Assembly in 2004, the measure would be placed on a statewide ballot in May 2005.

http://www.asme.org/cpa/Appendices/Congress%202003%20AppX%20ATRAreport.pdf

If IDCC can wrap this up before May 2005, it would seem that an award of substantial damages against Federal is still possible.

Thanks for your excellent analysis of IDCC's complaint.

texb