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JimLur

03/07/04 11:47 AM

#60794 RE: Learning2vest #60790

L2v,

"From what I can understand, the current management at InterDigital is done with licensing "pieces and parts" of their intellectual property."

IMO you are 100% correct.
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Eneerg

03/07/04 2:18 PM

#60807 RE: Learning2vest #60790

Learningvest... a few big picture generalizations..

Like your approach. Perhaps the differentiator seldom discussed is the (unknown) Interdigital requested IPR rate on narrowband CDMA versus GSM. Back in 1999, Interdigital licensed NOK for the full suite of patents in the various standards, including 3G. Jumping forward a few years, at some point Ericy pulled out of the US CDMA handset biz, raising the question whether NOK, in addition to non-licensed CDMA handset producers, principally Samsung and LG Electronics (and non-US Ericy S/E), decided that US based Ericy S/E litigation EXCLUDED narrowband CDMA- and consequently concluded that Interdigital's IPR in conjunction with reported indemnification protection (from Q ?)warranted a lower CDMA rate than for GSM standards related products.

Bottom line appears as you've indicated, Interdigital's is currently licensing the entire suite of standards consistent with the NOKIA 1999 agreement- with the respective rates/standard being contested (NOK produced to all standards). Each OEM has to be viewed in terms of what standards they are producing to, and by all indications CDMA and the associated rates assigned by Interdigital, and associated accumulating royaties due, is one of the stumbling blocks.

Another stumbling block related to GSM products remains the infrastructure to handset ratio of NOKIA versus Ericy S/E. NOK 's gamble that Ericy would either prevail or collapse (a distinct possibility 2 years ago), negating the contractual GSM 2G provision trigger, has culminated in the final default recourse- arbitration- most likely the result of the realization by NOKIA they made a serious blunder in allowing the king of infrastructure to establish low GSM infrastructure rates offset by higher GSM handset rates- where NOK's handset liability is several multiples that of S/E volume-wise. The good news for NOK is their management can always blame the arbitrator's, who need to address two main issues- was SE Ericy the GSM trigger and what was the applicable default rate for GSM handsets?- should Interdigital fully prevail. Perhaps they can resolve the CDMA rate as well while they are at it!

Hopefully, whatever resolution results from arbitration will include the 2G CDMA patents that NOK is licensed for- which stand apart from US non-CDMA S/E Ericy agreements - unless CDMA was contractually spelled out to be at the same rate as the GSM standard in the 1999 agreement. You can be rest assured that Korean producers Samsung and LG are among those unlicensed for CDMA are aligned behind NOK in this regard.

Insofar as 3G is concerned, the Japanese early licensees are arguably entitled to preferential rates, which were established years before NOK and European cartel friends and allies attempted to cap royalties- which remains contested by non-manufacturers QCOM and Interdigital. The strength of a win over Ericy S/E in combination with a strong balance sheet and formidable presence in 3G has enabled Interdigital to hold off piecemeal licensing of any standard, including 3G, until the full suite of standards are agreed upon, meaning the early Japanese licensees, particularly Sharp, NEC, and Matsushita, are entitled to the lowest 3G rates.

Ironically, it is the same Japanese licensees that got the 3G jump on the Europeans (excluding Panasonic which will soon be a formidable FOMA supplier, that are supplying the bulk of ongoing revenues until NOK/Samsung business 2G logjam is resolved.

Lucent litigation is a side issue involving specific CDMA (2000) Tantivy patents- and the intertwine with the above isn't alll that certain.
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ziploc_1

03/07/04 10:25 PM

#60837 RE: Learning2vest #60790

L2V If this is their business plan, I think its a good one. I would like it even more if they could find a way to get Nok, which signed a license back in 1999, to pay for 3G and then they could institute their plan for all new licensees from that point on. They could make an exception for Lu because of extenuating circumstances.