Replies to post #109108 on InterDigital Inc (IDCC)

[sinnet14]

one of the best posts in this board!
recommended to everyone.

[glennymo]

i believe the difference this time is we have known factors.
we know a rate and we know the sales volume. the question would be trigger. if no settlement i say we get at least 80% of
x times y. from all of nok's screaming and convulsions, i am not sure 3g isnt also included. at least thru 06.

[tookme5]

I'm assuming that the original estimate was based on the 'rate' from S/E applied against Nokia's sales figures gathered from various industry sources. S/E was a different animal since it was settled out of court. Absent settlement, I would be very diasppointed if the award is less than $400M. JMHO

[gman1962]

bulldzr



one thing to remember about the 30M number. guess where that came from? nok's org ~30M paid up license to the end of 2002(1?, can't remember which), then both nec and ericy started paying from that point forward (re: mfl). things that make you go hhhmmmm........


jmho

gman

[goblue]

bulldzr--some things to keep in mind:

a. the arb panel never awarded us $30 million in the NEC case. in fact, they never made a ruling at all. we SETTLED for that amount in addition to a recurring royalty bearing 3G contract. looking back on it now, it was a GREAT deal--esp when you consider that arb had NOTHING to do w/3G.

b. the difference betw nec & ericy vs nok is that howard and co NEVER outright boasted about how much they were seeking or expecting in nec and ericy....if you wanted to find that out, you had to dig around in a few SEC filings.....whereas nokia they mentioned it not only in sec filings, but CC's and PR's as well....imo, that's one indicator of how confident howie and co were in our position.....they truly believe they're owed the amounts they stated......HOWEVER...since nok has now launched an all out war including 3G, it may be worth it for idcc to settle for much less in 2G in exchange for a royalty bearing 3G contract a la NEC......mho

ps how bout that michigan softball squad??

[warbil]

One of the things that concerned me in the arbitration hearings was Nokia's argument concerning the term "relevant factors" in the ERICY agreement. Initially, Nokia implied that the term "relevant factors" applied to the number of patents being licensed. I believe Nokia later implied that the term may apply to price differentials for volume levels.

Assuming ERICY is ruled a valid trigger (I believe they are), the amount of the award will depend on the arbitration panel's interpretation of the term "relevant factors" in the ERICY agreement. If the term "relevant factors" does not apply to patent quantities or market share, I would anticipate $340 - $360 million in royalties plus $20 - $30 million in interest.

If the panel adjusts Nokia's rate for volume discounts using the "relevant factors" argument. You might cut that in half.

[Ricardo Montalban]

I agree and I would add another reason to expedct the award to be lower than IDCC beleived. The arb board may look at the Sony Ericsonn deal and use the numbers from that. IDCC of course discounted its royalty rates to Sony Ericsonn because it got the first major league player to pay royalties thus triggering Nokia. But once we set that rate, we may be hoisted by our own pitard. The arb board may use those numbers in fixing the amount Nokia must pay. However, on the other hand, the Board may alsobpunish Nokia for not paying up and for causing this to go to litigation (arb is a form of litigation) and being the party at fault. Let's hope there is that used in the factors the Board considers in setting its damages.There may also be punitives included. So there is a great unknown and the amount granted to IDCC for its patents may be a lot less thna IDCC hoped for, but other factors may increase that amount somewhat. It should be soon now and dontbe surprised if it is significantly below the $300 million we hope for.

[Dave Davis]

bulldzr:

I am sure you have seen this report by Tom Carpenter; but I read your post and thought I might post the link again.

Exhibit I has a good basis for why we might expect an award of more than $75 - $90 million.

I hear you re: prior settlements. But just because we settled for less in the past does not mean that it will happen this time.

Personally, my expectation is an award of about $270 to $300 million.

Dave

http://wirelessledger.com/idccApril2005.pdf