Replies to post #51044 on InterDigital Inc (IDCC)

[Petersimon]

ddajr,

Welcome, IDCC is a small company with lots of intellectual properties (patents) on the wireless technology. Infact they are pioneer and a leading edge company in this business.

Since their technology is one of the best if not the best in the wireless sector, the big companies such as NOKIA ERICSSON, MOtOROLA and others want to use their inventions without paying them a dime. This is the normal modus-operandi of this big companies......use other company's technology (invention) and pay later when caught. They are not easy to catch...even though you caught them red handed you still have to prove it in the court of law and this big companies have retained batteries of lawyers that can twist anything they want to save a buck. In addition, by not paying they save a lot of interest on their money...normally when the verdict is given the small company end up with minimal compensation payment for their invention...if they are lucky to go the distance.

My heart goes to the engineers and scientist who invewnted all this wonderfull technology that is being use all over the world.....and had been waiting for so long for their just compensation.....only to (the future whether they will be compensated lies in the hands of the lawyers now)

I always advise my children not to study engineering like me ( I am an old retired engineer)but steered them to Law and economics.

Engineer produce and invent product (an 8 - 5 job)....but guess who end up with all the money...the lawyers and economist...those who know how money works. ( as the saying goes, don't work for money, let money work for you... invest in the stockmarket)

Well, last week my daughter Gi passed the California Bar Exam and now a full pledge Patent Lawyer. She has 5 years of research experience and a graduate at CAL Berkley of Molecular Cell biololgy. Another daughter taking economics at UCLA. Glad, they listen to my advise.

As far as IDCC, they have taken the biggest Equipment manufacturer NOKIA to arbitration (after forcing ERICY to settlement)and hopefully when NOKIA succumb..it will have a domino effect in the industry...and all or majority will be licensing our intellectual properties. That's how they protect their intellectual properties...take the biggest fish and fry them in boiling corn oil. Welcome again, the preceeding was what I have learned here following all the excellent post from unselfish individual an experts on their field.

I sleep soundly every night knowing that even if I lost most of my money invested in IDCC, I will be losing money with great people and company.

Actually, you can't loose here with all the expert advise from excellent attorneys,engineers, CEO, accountant and other professions...you name it we got it.... you will be ahead here even compared to analyst, institution and others. You will know in advance ahead of others if there is something wrong to make your own investment decision. All in my humble opinion.
Peace to you.
Petersimon

[rmarchma]

Ddajr re infringement questions

First welcome to this IDCC investment forum. IDCC can be a frustrating investment at times because of the infringement issue. IDCC and we investors believe that all wireless manufacturers should be licensed and paying IDCC royalty. However, the frustrating and sad truth is that not all the wireless OEM’’s are licensed and paying. Therefore your two questions are certainly not naïve, but rather get to the heart of the situation. Your first question as follows:

....”How is it that so many corporations find themselves, or at least are purported to be infringing on IDCC patented technologies? “

IDCC currently claims essential patents in each and every wireless standard. By the strict definition of an “essential patent”, it is one that can not be bypassed or designed around by a wireless manufacturer who makes a product, such as a wireless phone, to a particular wireless standard. Therefore, if IDCC truly has “essential” patents for each wireless standard, then unlicensed manufacturers are infringing and should legally license with IDCC. What IDCC claims to have is best represented by the following statements from IDCC’s latest 10K:

"We believe that we have a number of patents or patents applied for that are essential to the implementation of all the technology specifications incorporated in the current 2G and 3G standards. Those standards include, but are not limited to, TIA/EIA-54/136, narrowband CDMA (TIA/EIA-95 and similar standards), WCDMA (both FDD and TDD), CDMA2000, GSM, PDC, PHS and DECT. We also expect that many of our patents or patents that issue from existing applications will be commercially important in the actual 2G and 3G product implementations…We also believe that our patents have application beyond the digital cellular environment, including wireless LAN.”

IDCC’s claims to essentiality are backed up by important sources. The best support that a technology company has the essential IPR that they claim to have is signed licenses. With the 2G licensing of Ericy in March, IDCC now claims to have over 70% of the 2G TDMA/GSM/GPRS market actually licensed. However, a large part of IDCC’s licensed 2G market, Nokia and Samsung, are not yet paying due to a 2G royalty rate dispute with IDCC.

The two major unlicensed 2G handset manufacturers at this point are Motorola and LG. Motorola did win a 2G court case against IDCC in 1995, which involved some of IDCC’s early foundational TDMA-based system patents. Korea’s LG is a recent entrant into the GSM/GPRS market, but they have done extremely well in a short period of time. There are now several Chinese and Taiwanese wireless manufacturers, who are also recent entrants into the GSM/GPRS market. Perhaps most of the unlicensed 2G infringers are waiting to see how the Nokia/Samsung arbitration plays out before licensing with IDCC. I don’t think IDCC will go after these unlicensed 2G companies by legal means until after the Nokia/Samsung 2G rate dispute is resolved.

Your second question as follows:

....”And what is IDCC doing/plan to do to guard against further infringment?”

I suppose some of our worry now is over 3G licensing, which began with the deployment of CDMA2000 over two years ago. WCDMA deployment just began this year. IDCC does have several 3G licenses in place at the current time. Thus far NEC, Sharp, Infineon, Nokia, Matsushita, Japan Radio, Tantivy, and Hop-On have all licensed with IDCC for all of the 3G standards. However, IDCC has not signed a significant 3G license since NEC in January 2002. A lot has been written lately on this board about the hold-up in 3G licensing. I recently talked to IDCC’s Investors Relations about licensing issues and reported such in the following linked post:

http://www.investorshub.com/boards/read_msg.asp?message_id=1591961

A lot of those licensing issues were addressed in the latest IDCC Conference Call by Bill Merritt, the head of IDCC’s licensing subsidiary. We are all hoping that IDCC will have a little easier time licensing 3G than they did with 2G, and will not have to resort to the legal system to get companies licensed for 3G. So as we expectantly wait for IDCC’s 3G licensing to rev-up again, I am confident that IDCC has what they claim in 3G and will eventually get paid for it. In addition to the current 3G licenses, a couple of other sources have verified IDCC’s claim to essential 3G IPR as follows:

PA Consulting, a premier consulting firm from the United Kingdom, also specifically mentioned InterDigital as a major IPR owner of WCDMA patents:

…"The W-CDMA IPR owners such as Qualcomm, InterDigital, Ericsson, Motorola and Lucent among others claim to have the majority of essential 3G patents and PA estimates they claim royalties of about 10% of the 3G BTS factory gate price compared to about 5% royalty rates for GSM BTS."

(www.paconsulting.com/innovation/mag/articles/3gbts.asp).

Sam Omatseye, renowned investment journalist, stated the following in his article on 3G patents:
Patent count doesn't add up
by SAM OMATSEYE
• May 27, 2002

”Truth may be the chief casualty in the claims by three wireless titans as to which holds the most essential patents for wideband CDMA, the air-interface technology that provides speed for multimedia services like picture and music downloads and video on demand…..San Diego-based Qualcomm Inc., Helsinki, Finland-based Nokia Corp. and Stockholm, Sweden-based L.M. Ericsson each claim to have the most patents. A fourth company, InterDigital Corp., is the only other player with a healthy number of patents in this area, but it said it has no interest in entering the fray.”

http://ragingbull.lycos.com/mboard/boards.cgi?board=CLB00004&read=95142

I also get a degree of comfort by IDCC doing some preliminary things a lot better in 3G than in 2G. Unlike 2G, IDCC is very involved in developing the 3G standards and is actively participating in various industry forums and organizations. From my compelling reasons document as follows:

11. IDCC is very actively involved in the various standard bodies and worldwide organizations, such as, the UMTS Forum, the GSM Association, the TD-SCDMA Forum, and the TDD Coalition, which promote and inform the wireless industry. These organizations are composed of the leading equipment manufacturers, chip producers, telecom operators, software developers, wireless IPR owners, and other interested suppliers and parties. This active involvement further enhances IDCC’s growing reputation as a leading company within, and a major supplier of enabling technologies to the wireless industry.

From the latest 10K:

“To facilitate our position as a contributor to emerging wireless technologies, we are active in the Third Generation Partnership Project (3GPP), through our membership in the European Telecommunications Standards Institute (ETSI), and have been an active member of several Standards Development Organizations and industry associations that influence and sponsor standards development including the ITU, the telecommunications Industry Association (TIA), the Engineering Subcommittee T1P1 (T1P1), the Institute of Electrical and Electronic Engineers (IEEE) and the American National Standards Institute (ANSI). For 3G standards, we have submitted nearly 1,000 contributions to standards bodies worldwide and over 60% of those contributions have been adopted.

We have made technical contributions in the IEEE Standards bodies and expect that effort to expand. We have also taken leadership positions in a number of these standards bodies. Company management and engineers either have served or are currently serving in a number of leadership positions in key industry standards bodies including past Chair of the IEEE 802.16a Task Group (Broadband Wireless Access, 2-11 GHz), current Chair of the IEEE 802.16e Task Group (Mobile Broadband Wireless Access, based on the 2-11GHz IEEE 802.16a air interface); current Vice Chair of the 3GPP RAN Working Group 3 (WG3); Vice Chair of T1P1.4 Wireless Wideband Internet Access; past North American Rapporteur for ITU-R IMT-2000 Deployment Handbook; past Editor, 3GPP RAN WG1 Physical Layer Procedures (TDD)(R5) and past Editor and Rapporteur, 3GPP RAN WG4, TDD Base Station Classification.

In addition to our participation in a number of standards bodies, we are also active in several technology forums that foster our business interests. For example, our Chief Technology Officer (CTO) chairs the Universal Mobile Telecommunications System (UMTS) Forum Task Force on TDD and Wireless LANs, and is the Chair, as well as a member of the Associate Member Interest Group (AMIG) of the GSM Association. Our Chief Operating Officer is the Vice-Chair of the Manufacturing Task Force for the UMTS Forum. A member of our CTO Office is the Co-chair of the GSM Association’s Wireless LANs Task Force. Further, we are a Council Member (a senior level position held by a limited number of the world’s leading wireless companies) of the TD-SCDMA Forum, and a member in the TDD Coalition, an industry consortium which promotes TDD airlink technology.”

IDCC hosted and was a major presenter at a General Assembly meeting of the UMTS Forum. From a press release dated 6/6/02:

"InterDigital today announced that it is hosting the General Assembly of the UMTS Forum and its members for a two day conference on 3G wireless services on June 6 and 7, 2002 in Philadelphia, Pennsylvania, USA…The UMTS Forum is an international organization with more than 236 member companies from the mobile operator, supplier, regulatory, consultant, IT and media/content communities in over 41 countries worldwide. The Forum's goal is to promote global success for 3G services delivered on all 3G technologies recognized by the International Telecommunication Union (ITU).

During the General Assembly, Dr. Alain Briancon, InterDigital's Chief Technology Officer, will report the initial findings of a UMTS task force focused on the deployment of Time Division Duplex (TDD) technology and Wireless Local Area Networks (WLANs) for 3G wireless data services. This UMTS task force will ultimately make recommendations to operators on deployment scenarios for TDD technology to cost effectively deliver wireless data services to consumers worldwide. Dr. Briancon also will report the results of a survey taken to gather and evaluate the attitudes of operators and service providers regarding the timing of the rollout of 3G wireless."

Interdigital was ratified as an associate member of the prestigious GSM Association. Only telecom operators can be ratified as full members into the GSM Association. Then IDCC was afforded the very high honor of being one of the few non-operator presenters at their annual meeting in Rome. From a press release dated 4/18/02:

“ROME, Apr 18, 2002 (BUSINESS WIRE) -- InterDigital Communications Corporation (Nasdaq:IDCC), a leading architect, designer and provider of advanced wireless technologies and product platforms, highlighted the advantages of Wideband Time Division Duplex (WTDD) technology for 3GSM(TM) networks, driven by its power to enhance the quality of service and the continuity of the user experience in the migration to 3G products and services.

The presentation was delivered to the 47th GSM(TM) Plenary meeting held this week in Rome and attended by over 500 members of the GSM Association, representing mobile network operators and suppliers worldwide. InterDigital also was ratified as an Associate Member of the GSM Association during the Plenary.

In his presentation, InterDigital's Chief Operating Officer Rip Tilden stated that WTDD technology, part of the 3GSM Wideband CDMA (WCDMA) standard, can significantly enhance the experience for 3G users as they access advanced data services, making the technology an important competitive offering for operators. He defined the continuity of user experience as the highest quality of service possible as users move smoothly among a wide range of advanced data services and among 3G networks globally utilizing a variety of devices.”

IDCC also has substantial IPR even in a TDD standard option, TD-SCDMA, advocated by the Chinese. In November ’02 the Chinese government announced that they would allocate twice as much radio spectrum for TD-SCDMA than for any other 3G standard. This is a very clear indication that the Chinese government will greatly encourage the development and deployment of the TD-SCDMA standard in China. IDCC has extensive essential IPR in TDD and has publicly stated that 75% of its WTDD IPR also applies to TD-SCDMA.

IDCC was elected as a member at large of the TDS-CDMA forum, and then immediately selected into the highest echelon of this organization as a Council Member. The Chinese market is usually extremely difficult to enter, and those companies that do gain entrance usually have to invest heavily in China. IDCC has just entered into the middle of the developments in the largest wireless market in the world through invitation rather than investment. The following excerpts are from an IDCC press release dated 01/17/02:

“The TD-SCDMA Forum, organized in September 2000 by the China Mobile Communications Association, was created to promote the development and advancement of TD-SCDMA technology and applications within China and throughout the world. The Forum, with more than 300 members, provides a platform for worldwide exchange to communicate ideas or developments that impact TD-SCDMA technology.

In recognition of its leading position as a global developer of TDD technology and products, InterDigital will join other Forum Council members, including Alcatel China, China Mobile, China Telecom, China Unicom, CATT, CNC, CRTC, DaTang Group, Huawei Corporation, Jitong, Siemens, Motorola, Nortel, Qualcomm, UT Starcom and Zhongxing in promoting the development and application of TD-SCDMA technology.

Our selection as a Council Member reflects industry recognition of InterDigital's strong position as a pioneer of Time Division Duplex (TDD) technology. With almost 500 contributions to Third Generation (3G) standards to date, InterDigital is one of the wireless industry's leaders in defining the TDD standard for the 3G wireless market….The 3G WCDMA standard incorporates both TD-SCDMA and WTDD, along with FDD technology. The two forms of TDD technology have strengths in different deployment scenarios for different market needs.….TD-SCDMA complements and fits the evolution of GSM networks….InterDigital, with its strong TDD technology focus, is well positioned to deliver TDD solutions worldwide. At least 75% of the core TDD technology we are developing can be employed in either TD-SCDMA or WTDD applications. Much of this core TDD technology is incorporated into contributions accepted by worldwide standards organizations.”

Infineon and IDCC have developed an FDD chipset that utilizes much of InterDigital’s FDD IPR, and will be instrumental in the worldwide deployment of this technology. Nokia and IDCC have thoroughly tested WTDD, and will be instrumental in the successful worldwide deployment of this technology. Other companies have quickly recognized the many benefits of TDD technology based on the test results and have very recently established the TDD Coalition. Information about the TDD Coalition as follows:

“The TDD Coalition a new industry consortium whose purpose is to promote Time Division Duplexing (TDD) airlink technology and explain its benefits to operators, regulatory bodies, standard groups, the media, and the broadband industry in general. The coalition shares a common conviction that TDD is a spectrally efficient and cost-efficient airlink technology, which can offer tremendous benefits to broadband wireless operators and their customers.”

The coalition's 15- member organization include Aperto Networks, ArrayComm, BeamReach Networks, CALY Networks, Clearwire Technologies, Harris Corp., InterDigital, IPWireless, LinkAir, Malibu Networks, Navini Networks, Pointred Technologies,Radiant Networks, Raze Technologies, and Wavion. For more information about the TDD Coalition visit http://www.tddcoalition.org ."

[Dave Davis]

ddajr: Another good source of info on IDCC is:

http://www.wirelessledger.com/

Welcome aboard.

Dave Davis