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Parkervision (NASDAQ:PRKR)

Q4 2012 Earnings Call

March 18, 2013 4:30 pm ET

Executives

Ron Stabiner

Cynthia L. Poehlman - Chief Financial Officer, Principal Accounting Officer and Corporate Secretary

Jeffrey L. Parker - Chairman and Chief Executive Officer

Analysts

Johnny Guan

Jon R. Hickman - Ladenburg Thalmann & Co. Inc., Research Division

Walter Schenker

Philip Anderson

Robert B. Brown - Brill Securities, Inc.

Steve Springer

Operator

Good afternoon, and welcome to the ParkerVision, Inc. 2012 Fourth Quarter and Year-End Conference Call and Webcast. Today's conference is being recorded. [Operator Instructions] As it is now time for opening remarks and introductions, I would like to turn the conference over to Ron Stabiner with The Wall Street Group. Please go ahead, sir.

Ron Stabiner

Thank you, Kate. Good afternoon, and thank you for joining us. Before we get started, I would like to remind listeners that this conference call will contain forward-looking statements, which involve known and unknown risks and uncertainties about our business and the economy, and other factors that may cause actual results to differ materially from our expected achievements and anticipated results.

Included in these factors is the ability to maintain technological advantages in the marketplace, the ability to increase manufacturing capacity to meet demands, achieving timely market introduction and acceptance of product, maintaining our patent protection and the availability of capital, among others.

Given these uncertainties and other factors for our business, listeners are cautioned not to place undue reliance on any forward-looking statement contained within this conference call. Additional materials concerning these and other risks can be found in our filings with the Securities and Exchange Commission.

On today's call, we'll hear first from Cindy Poehlman, Chief Financial Officer of ParkerVision, who will provide a review of the company's fourth quarter and year-end results. And she'll be followed by Jeffrey Parker, Chief Executive Officer of ParkerVision, who will provide an update on the business of the company.

And with that, I will now turn the call over to Cindy. Please go ahead.

Cynthia L. Poehlman

Thank you, Ron, and good afternoon to those of you joining us for ParkerVision's 2012 Fourth Quarter and Year-End Conference Call.

Today, we reported a net loss of $6.2 million or $0.07 per share for the fourth quarter of 2012 compared to a net loss of $3.9 million or $0.06 per share for the fourth quarter of 2011. For the year ended December 31, 2012, we reported a net loss of $20.3 million or $0.27 per share compared to $14.6 million or $0.24 per share in 2011.

There were 2 factors really that accounted for nearly 90% of the increase in our net loss both on a quarterly basis and for the full year. Those factors were an increase in professional fees and an increase in noncash share-based compensation. Our share-based compensation expenses increased by approximately $900,000 on a quarter-to-quarter basis and approximately $2.1 million for the full year. These increases are primarily the result of new equity awards to executives, employees, non-employee directors and third parties in 2012.

With regard to professional fees, which includes legal, accounting and outside consulting fees, we experienced an increase of approximately $2.8 million for the year, of which $1.2 million of that increase was incurred in the fourth quarter. These increased expenses were largely attributable to our ongoing patent infringement litigation against Qualcomm.

We used cash for operations at an average rate of approximately $1.2 million per month in 2012. This average usage increased to approximately $1.6 million per month during the fourth quarter due to the increases in litigation and other expenses I discussed. We ended the year with $8.3 million in cash and available-for-sale securities.

I'm available for any questions at the end of the call today, but for now, let me turn things over to Jeff Parker for an update on business activities.

Jeffrey L. Parker

Okay. Thank you, Cindy, and thanks to our attendees today for joining us for our year-end and fourth quarter conference call update. So when I look back at this past year, I believe we've made significant progress towards a number of key objectives. We received a number of favorable rulings as our patent infringement case against Qualcomm moves closer to trial. We reached a new agreement with VIA Telecom that enables us to move forward in our pursuit of sales of our RF chipsets for incorporation into CDMA mobile handsets and other devices. And we made positive strides towards expanding the business opportunities for our patented innovations, and I'd like to spend just a little time discussing each of these areas in more detail.

So over the past year, our patent infringement litigation against Qualcomm saw a number of key milestones and rulings. At this time last year, there were 70 public documents filed related to this case. And we had just received our court schedule, discovery was in its infancy, and the pleadings were in their early stages. If we fast-forward 12 months, there are now 245 public documents on file, we're about 6 months away from trial, discovery is complete, and there have been a number of key rulings by the court.

One key milestone is our recently received claim construction ruling, which by any reasonable reading, was favorable to ParkerVision. Not only was our litigation team pleased with the results of the Markman decision, they were also most impressed with the level of technical diligence that Judge Dalton and the Florida court displayed in this ruling. As you may know, the Markman order sets out the meaning of certain disputed patent claim language present in the patents in suit. The court interpretation is then applied during the trial in the determinations of infringement and validity. The Markman order is often a significant factor in the outcome of patent infringement litigation, and with this ruling, we remain confident in our position concerning Qualcomm's infringement of the patent claims at issue in this case. We continue to believe that this order is another significant step towards the successful resolution of this litigation.

Other key milestones in this case include the dismissal, dropping and/or abatement of all the counterclaims against ParkerVision and our patent prosecution law firm Sterne Kessler related to inequitable conduct, breach of fiduciary duty and tortious interference. The result is that our case is now focused on the original allegations we filed, which is that Qualcomm has knowingly and without our permission built their products based upon our patented technology. Additionally, now that discovery and depositions have been completed, our litigators have the visibility to further verify their assumptions about the merits and the strength of our case. While much of the information our litigators have gathered is not available outside of their eyes only, they tell me that they feel stronger than ever about the merits of our case.

As far as what to look forward to moving forward, expert reports have recently been filed by both sides and rebuttal to those reports are due in early April. These reports are confidential between the parties and not available for public viewing. The parties will be attending court-appointed mediation by early May. Certain motions are due for filing in the summer months, and we will be continuing to prepare for trial.

In the area of developing our own RF chipsets and bringing those to market, we made progress with a particular handset OEM customer of our baseband partner last year. Progress in this area slowed late last year when the handset OEM asked that we and VIA Telecom provide a level of support for the interface between our products that would satisfy their requirements for adoption. To that end, we've recently entered into a development and support agreement with VIA, which we believe enables us to continue to pursue the adoption of our RF chips into this OEM's mobile products. We continue to believe that our products provide competitive advantages over the ultimate choices that are available to handset OEMs.

As you may recall, we entered into a license agreement with VIA in 2007. That agreement provided for VIA to be able to incorporate our technology into their own CDMA RF chipsets. The agreement contemplated that ParkerVision could also develop and produce its own CDMA RF chipsets as well. As the relationship evolved, ParkerVision developed RF chipsets and worked with VIA to interface to their CDMA baseband processors with an expectation that initial revenues from our relationship would come from sales of products rather than royalties under the license. With VIA still not producing its own RF chipsets and the parties entering into a collaborative development agreement, this license became unnecessary. Therefore, ParkerVision and VIA mutually agreed to terminate the license as it was no longer relevant.

The license termination has no impact on our current relationship with VIA, and we are looking forward to continuing work with VIA under the new development agreement to offer their OEM customers an RF chipset based on our unique technologies that interfaces with VIA's baseband processors.

Looking beyond what we found in Qualcomm's use of our technology last year, we also engaged some of the top minds in intellectual property to help us better understand how our innovations are enabling the wireless industry. One of the principals at the firm of 3LP, Kevin Rivette, went on record last November with his view. But it is rare to find a technology such as our RF energy sampling innovation protected by a patent portfolio as comprehensively created and carefully written as he views ours have been. We believe our recent claim construction ruling confirms Mr. Rivette's view regarding the comprehensive nature of our patent filings as our patents provided the necessary support for most of the terms proposed by us and ultimately adopted by the court. Mr. Rivette further commented on his belief that our novel approach to RF down-conversion makes possible many of the latest generations of wireless products with applications as diverse as smartphones, satellite communications, Wi-Fi, GPS, Bluetooth and others.

The 3LP team had developed their views based on what they describe as a data-driven approach, an approach that has been developed and refined over a number of years of experience. This data-driven approach uses various methodologies for determining which products are likely to be using or need to use a company's patented innovations. Just as all products are based upon a bill of materials, 3LP can also determine what they call a bill of technologies that enable products and product categories. They are able to identify which companies are likely to be using or interested in using a company's patented innovation, what products are likely being designed or have already incorporated such innovations and what products have been enabled by specific patented innovations and what areas of industry.

We, along with McKool Smith, engaged 3LP to enter into dialogues with companies that, based on 3LP's research, we believe would be interested in some form of business relationship with ParkerVision. While there's no guarantee that these dialogues will result in any meaningful business relationship or that an outcome will occur in any particular time frame, we are encouraged that there are a number of firms who are now actively assessing their interest in some form of business relationship with ParkerVision. We are excited to see that the innovations we developed and protected and that we believe would play a critical role in shaping the wireless ecosystem are, in fact, doing so.

We mentioned in our year-end release that we were awarded 23 new patents and filed an additional 27 applications in 2012, bringing our total number of U.S. and foreign patents held to 211. Our belief in our wireless innovations and the importance of properly protecting these remains unchanged. We have a strong belief in the innovation process itself and in the best practices for the protection of those innovations.

Speaking of innovation, our CTO David Sorrells himself wears many hats in a small organization like ours and has done a phenomenal job over the years of leading the creation and protection of many wireless innovations that we have developed. As our number of patents and related innovations has grown and as our visibility into where those innovations will likely be used has also grown, we determined there was a need to expand the capacity of the intellectual property team at ParkerVision.

I'm pleased to report that ParkerVision has brought on staff our first in-house intellectual property-focused legal counselor. Tom Preston [ph] joins ParkerVision after a number of years of experience practicing intellectual property law in a range of activities. Tom is a third-generation patent attorney in his family. He was a patent examiner in Washington, D.C. at the United States Patent and Trademark Office. He's been involved as a patent attorney, both as an in-house counsel and as a member of a New York patent prosecution law firm. He has helped companies secure intellectual property protection as well as successfully execute license agreements for both licensees and licensors. At ParkerVision, Tom will work closely with our CTO and others to help further our goal of best practices in securing intellectual property protection for our growing number of innovations as well as help support what we believe will be the growing number of business opportunities to form relationships of various types with a number of companies who will want to use our innovations within their own products.

So we appreciate the strong and enthusiastic support that many of you in this investment community have demonstrated for ParkerVision. We believe we're making substantial progress on a number of fronts, continuing to build shareholder value and verifying that the technology that we have developed, some of it starting back as far as the late 1990s, were important ideas and investments of our resources back then and have secured a prominent place for ParkerVision in the wireless product ecosystem today and for years to come.

And so now I'd like to open this call for your questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of Johnny Guan with National Securities.

Johnny Guan

I was just curious, what are we looking for in damages versus Qualcomm? And is there a royalty rate that we're looking for?

Jeffrey L. Parker

Right. So that information actually is contained in the confidential report that we'll be filing back to Qualcomm. It contains our damages expert's estimate of damages. So at this time, we can't really publicly disclose the basis for our damages expert's opinion. It's based on Qualcomm's confidential information. However, I can tell you the damages asked is significant. In fact, as you may be aware, Qualcomm has listed this litigation as a potentially material contingency in its own securities filings. So I think it would be fair to say that if this litigation is material to Qualcomm, it's most certainty a material number for ParkerVision. But unfortunately, beyond that, I really can't give details on the damages analysis or the range of requested damages just at this time.

Johnny Guan

Okay. And as a quick follow-up question, what is the exact date for the court date? If -- I know it's in October, right?

Jeffrey L. Parker

It is -- October 7 is the start of the trial, yes.

Johnny Guan

Okay. And do we need to raise any money for the company until the trial?

Jeffrey L. Parker

Well, there's a likelihood that we will need to raise or add capital to the company before the trial. There's a number of things that we're looking at and a couple of different things that we think would satisfy those needs, but nothing that we're ready to talk about right now.

Operator

Our next question comes from the line of Jon Hickman with Ladenburg Thalmann.

Jon R. Hickman - Ladenburg Thalmann & Co. Inc., Research Division

Jeff, I was wondering if you could elaborate a little more on the VIA Telecom. My understanding from what you said is that you've canceled the old license agreement because they're not going to be making chips with your technology in it, but you have a new agreement with them: they guarantee support for the interface going forward.

Jeffrey L. Parker

Yes, that's right. Yes, so just to -- well, you got that right. So just to elaborate a little further, so yes, VIA was not using the license and is, to this date, still not producing their own RF chips. So they agreed mutually with us to go ahead and terminate the license agreement. What we've then entered into is a development agreement with them, and that basically says that they've agreed for a minimum of 3 years to support the software and firmware interfaces between their baseband processors and our RF chips and to do it at a level that we're confident will satisfy the handset OEM we're speaking to now and others that are likely to become targeted customers down the road. We've agreed, by the way, on an arm's length relationship to compensate them for that. We're not looking for freebies. We know that their resources are limited. They have to pick and choose where they spend their time. And so we came to an agreement with them on that, and I believe that's going to help us now move forward to get back on track with this handset OEM and move things forward.

Jon R. Hickman - Ladenburg Thalmann & Co. Inc., Research Division

So if I could make some -- or make you make some guesses, does that mean that maybe within the next couple of months we could see an order out of whoever this OEM is?

Jeffrey L. Parker

Well, Jon, look, I can't blame you for asking the time frame. It's a good question, but I really would rather not -- I'd rather not give an estimate just because it's -- I'd love to know that if I gave you an answer, it would be accurate, and I just don't know what the right time frame is to tell you. I can tell you that the handset OEM has been encouraging both parties to continue to work together. They really have continued to communicate with us on a regular basis that as soon as we get this in place, they're ready to move forward on the analysis to incorporate. And I would expect that we'll have people back working with them in a very short period of time now. So however quick it takes, beyond that, Jon, I don't know. We're all hoping for sooner than later. But I'll say this to you, I've gotten counsel from some of our long-term shareholders who have said, "Look, we're very excited about ParkerVision. You made predictions long ago that actually are coming to pass now about adoption of our technology into products, but you also made some predictions on adoption of some of our chips that are taking longer. You know what, if you don't know, don't make those predictions." I'm taking their advice. I think it's good advice.

Jon R. Hickman - Ladenburg Thalmann & Co. Inc., Research Division

Okay. Then one more question. You mentioned that there are discussions going on initiated by 3LP and Wilson Sonsini. And you said -- I think you said a number. Is that like 1 dozen, 2 dozen? Can you be like...

Jeffrey L. Parker

I'd rather not give an exact number, but I'll say this to you. They have, I think, done a really good job of getting a good number of parties interested in taking a look at our innovations, how those have been protected and the possibility of some form of business relationship with us. I'd rather not give out a specific number, but it's...

Jon R. Hickman - Ladenburg Thalmann & Co. Inc., Research Division

It's more than a couple, right?

Jeffrey L. Parker

It's definitely more than a couple, yes. It's significantly more than a couple.

Jon R. Hickman - Ladenburg Thalmann & Co. Inc., Research Division

Okay. And these are big companies and little companies or...

Jeffrey L. Parker

More big companies, not really little companies. These are more significant companies, yes.

Operator

Our next question comes from the line of Walter Schenker with MAZ Partners.

Walter Schenker

We'll try it one more time but maybe you won't answer. Why am I supposed to view the change in the VIA relationship as positive since we spent years and various permutations working with them on an exclusive basis and it seems as if we now no longer have that exclusive relationship, and you can almost infer that you're going to end up paying them so they can sell product that incorporates your chip?

Jeffrey L. Parker

No, not at all. Let me -- I didn't intend it to be interpreted that way, and it shouldn't be. So here's -- let me give you a little more clarification. From the time we started working with VIA until current day, they have never exercised any of their rights under the license. And in, I think, almost every Q and K thereafter, we've explained that ParkerVision's developing the chips, we're working closely with VIA to do the interface, we fully expect to sell the first chips, and hopefully, sometime after the first chips, I think we've said in our previous reports, they may exercise the license. To this date, they're still not doing any of their own RF. So we basically said, "Look, it's not -- there's no good reason to have an idle license out there." And we explained to them why, and they agreed with that, and they agreed to mutually terminate it. The only sticking point with VIA has been recently where they said, "Look, we have limited resources. We have lots of handset companies and network carriers pulling at our resources to do software and firmware and all kinds of support." And so the way we remove that bottleneck or that issue was to say to VIA, "Look, we're not looking for a freebie. We are happy to pay our fair share of your support services like anybody would to get things done." And so they said, "Okay, well, that's different. That makes us feel like you're not looking to ride on our back." And by the way, we don't want VIA to ride on our back. We want to have an arm's length, mutually beneficial relationship for both parties. So we've always expected to develop the chips, and that's what we've done. We always expected to deliver the chips. That's what we're doing. And at this point, since they're not doing their own RF, we don't see the need for the license. They agreed with that. And I see this has now uncapped the bottleneck that we had here, which kind of was the impediment to satisfying the handset OEM that VIA would support the program. And in fact, I was pleased they were willing to agree to that for at least a 3-year period. So I think it's a good working relationship between 2 companies trying to help each other get products into the market and where the 2 companies recognize that our products together are stronger than they are apart.

Walter Schenker

And just one other question. By eliminating the license, if as part of a litigation settlement or anything else, another company might want to work with you to make these chipsets, they would now -- you would now be free to do that?

Jeffrey L. Parker

Let's just say we are free to do with our intellectual property as we see fit. We have no encumbrances on our intellectual property at all.

Walter Schenker

But you would have before?

Jeffrey L. Parker

Let's just leave it as we are free to do with our intellectual property going forward whatever it is we want to do, okay?

Operator

Our next question comes from the line of Philip Anderson with Pinnacle.

Philip Anderson

Jeff, I just want to keep drilling down on VIA and the evolution here. Presumably, and correct me if my presumption is wrong, presumably the lead OEM prospect didn't let the negotiation between VIA and ParkerVision that has resulted in today's new arrangement. That arrangement didn't happen in a vacuum. And presumably, the current arrangement satisfies that OEM's desire to have this relationship move forward, which ultimately would become an order if they choose to purchase from us, i.e., they're happy with what they got. Would that presumption be correct?

Jeffrey L. Parker

That would be correct. I mean, we know what the handset OEM is looking for, and we created the agreement with VIA to satisfy that.

Philip Anderson

Switching gears for a second with 3LP. What level of access do they get? Are they going in at an engineering level? Do they go in at the executive level? Can you talk about how they go in and what the process is through which they educate these companies to try to cause them to get into business with us?

Jeffrey L. Parker

So 3LP has done what we would consider to be a pretty in-depth amount of research to put together a picture of our entire patent portfolio, not just, by the way, one segment, but the whole thing. So with that picture, in which they believe our intellectual property represents terrific opportunity for various companies to want to do business with ParkerVision, then the next step is to figure out how we engage in a dialogue with them. It's a little bit of a delicate situation because it really requires that for another party to see all that 3LP has been able to put together requires a fairly restrictive type of nondisclosure agreement that basically protects the rights of both companies, both the information to be confidential and discussions to be confidential, among other things. So that process can be sometimes a little bit onerous because it requires buy-in at the most senior levels at a company. And especially if the company is larger, you might imagine that, that becomes a somewhat large bureaucracy to have to work with. But I give 3LP a lot of credit because they succeeded in getting a number of these agreements signed with very large companies who are very interested in us and who are in the process now of going through the information with 3LP and trying to determine exactly how that might influence one form or another of a business relationship with us.

Philip Anderson

All right. When [indiscernible] QSC6270 chip, if someone had read the patent suit and read that tear-down report, and understood what they are reading, the circuitry -- the ParkerVision circuitry is revealed inside that tear-down report. Is that level of tangible proof, if you will, available to 3LP with these various companies they're talking to? Can they -- they say a picture is as good as a thousand words. Do they have that level of detail or evidence -- maybe evidence is not the right word, to help them draw the attention of these companies?

Jeffrey L. Parker

A couple of things. 3LP has, over the years, developed very sophisticated tools that help them -- in my presentation, I think I mentioned the word data-driven. What I mean by that is they developed some very sophisticated tools. Some of these tools, by the way, have been licensed or sold to other large companies who use these tools for all kinds of intellectual property, forensics themselves. I mean, this has been a lifelong passion for some of the principals at that 3LP firm. Those tools have a track history now of indicating either initial evidence of use or trends of an industry adopting or technologies that are enabling certain trends to occur in an industry. And what's, I think, very beneficial for ParkerVision is 3LP is not an unknown entity among a number of the companies that are either already in discussion with us or who are currently looking at getting into discussion with us. They have a track record. So I'm not really at liberty to go into the specific data that 3LP may use, but they've got a good reputation for bringing people information that's accurate and that's useful and that helps see things the way they are and also see things for the way they're moving in terms of the forecast for the future. So it's kind of an aggregate of all of that. Now of course, they've also got the benefit of some of the public documents that are in this patent lawsuit. I mean, the infringement contentions that we filed against Qualcomm are public, and so they can also use some of that evidence, which is also helpful. But they have information that goes way beyond that from the tools they've developed over years of experience.

Philip Anderson

I appreciate the answer, frankly, it was more than I had expected. I thought I was reaching a bit on that question. I have one more, which might be a bit of a reach, too. Part of the...

Jeffrey L. Parker

I don't mean to sound like an advertisement for 3LP, but they have a very sophisticated approach to this, Phil.

Philip Anderson

Part of the market value of ParkerVision, in my opinion, is based upon the imprimatur of McKool Smith, and that imprimatur took a bit of a hit last week when they did not win the case versus Cisco. And if this was a private company, maybe this question wouldn't be so of interest in my own mind. But as a public company, I think the company's valuation have suffered a bit. Are there any -- when you talk to McKool or 3LP or whomever, are there any distinctions between the circumstances in that, in VirnetX versus Cisco, that might not apply to ParkerVision versus Qualcomm or vice versa that would be of interest for people to know?

Jeffrey L. Parker

Well, good question, so let me say it this way. First of all, I have to first say that I am not an expert on the details behind the VirnetX versus Cisco case. I did ask McKool Smith to give me guidance in how I might answer a question similar to the one you just asked, Phil, and the one thing they told me is, look, there's absolutely no relevance between the jury's decision in that case and ParkerVision's case, none whatsoever. One of the things that McKool Smith continues to remain extremely enthusiastic about is a lot of the fact history behind our case and the unusual nature of that, just in general, when you think about patent infringement cases. I won't say that the things I'm about to share with you, which we talked about in the past on various calls and conferences, are unheard of, but they are unusual, and I'll say, in aggregate, make them even more usual. So in our situation with Qualcomm, as you know, we had non-disclosures between the parties, not just at a corporate level but personal, individual non-disclosures. We had licensing negotiations, which contrary to some people's opinions, they were very well documented, are very well documented. And the offers that they made to license the technology are well documented. There is public information that specifically is what pointed us to finding the infringement that Qualcomm has committed. And McKool Smith feels extremely confident that they're going to be able to prove willful infringement. In my remarks earlier, I said to you now that discovery is closed, which includes, by the way, depositions are closed, that McKool Smith has never been more excited about this case as they are today. Unfortunately, we, as the client, don't get to see most of the information that they've gotten in discovery and a lot of the information in depositions because it's Qualcomm's confidential information. It's for attorneys' eyes only. So what McKool Smith has been able to tell me is that some of the information they've gotten certainly is going to be very useful for a jury to come to the correct conclusion and that it further supports the story that we came to McKool Smith with and the whole circumstances around this. So that's my long-winded way of saying to you that I think we have a very different circumstance here than you'd see in most any patent infringement case, maybe not any, but in most of them. And I think one of the -- the analogy I would give you, Phil, it's kind of like in our situation because of all these facts, it's kind of like there's dots on a page and they form a shape and McKool Smith's job in front of the jury is to fill in the dots with lines. And I think when they finish filling those in for a jury, they're going to be a circle, and Qualcomm's going to be in the center of that. Most patent cases, you've got to put the dots on the page. You've got to build those dots, and then you've got to draw the lines. So I think this is one of the reasons McKool Smith is bullish and excited about our case and what distinguishes it from most patent infringement cases out there.

Philip Anderson

Thanks. And also congratulations on getting VIA where you need them to be so you can finally get the OEM order.

Jeffrey L. Parker

We're excited to be able to continue to work with VIA, and we truly believe this will be good for both companies.

Operator

Our next question comes from the line of Robert Brown with Brill Securities.

Robert B. Brown - Brill Securities, Inc.

Well, unfortunately, my questions have been answered. The only thing is that I want to know about this OEM mobile producer. The problem, as I see it, you have been dealing with this person for 18 months at least, and as far as I recall, all the tests were finished and I think they were very satisfied with the results and that is a quarter ago. So why is it taking so long to get this thing with VIA straightened out? I mean, we're aware of this for some time and it's been remiss that we haven't gone further since -- if the test was so good last time.

Jeffrey L. Parker

Well, I don't know it's remiss, Bob, but it's certainly a shame. So I'll say this. Look, in order for 2 parties to move forward, they have to see value in doing so. And I think it took a little while for us to get with VIA and to lay out a plan that they could buy into that said, "Okay, this is where we're willing to invest some of our precious resources." They're a company that their support resources are in high demand, and they are pulled on a lot from a lot of different customers and customers of customers like the network carriers who buy handsets from OEMs. And we had to get VIA to agree that ParkerVision was also high on the list for and worthy of support. It took a while to do that, but we got that, and I'm appreciative of that, very appreciative of them doing that.

Robert B. Brown - Brill Securities, Inc.

Well, I agree with that. But since both of you know who the end user is, I assume by the length in time it's someone extremely substantial and probably a major, so I don't understand why they're dealing with other people and not concentrating on you.

Jeffrey L. Parker

Well, let me say it this way. For ParkerVision, we are working like crazy to try to get into the game and to try to get into shipping chips. VIA's already shipping chips, and they've got all the day-to-day support requirements of that, references and designs that are ongoing all the time, et cetera. So for them, it was a matter of prioritizing where ParkerVision fit along with everything else they're involved with. And as I say, I'm just pleased that they came to the conclusion that was favorable and we can now move forward.

Robert B. Brown - Brill Securities, Inc.

Well, all right. Additionally can I just ask one little question with regard to the use of the intellectual property firms that assisted you -- are assisting you? If, for example, you contact someone and you find that they are not cooperative, are you prepared to go to the next step, which would be to possibly sue them for use of your chips or things like that, or are your patents?

Jeffrey L. Parker

Yes, that's a great question. I think it really depends on the circumstances. Right now, I think we have a gracious plenty on our plate in working with McKool Smith and supporting them. And trial 6-plus months away is going to go by in 3 blinks of an eye. So I think what this opportunity between now and trial is, is it's going to help us understand the landscape of who does want to be collegial and who doesn't. And obviously, we're going to focus on those who are collegial. If we end up building a list of those who don't want to be collegial, then depending upon where we are after trial and where our resources are available, et cetera, we'll address that at that time. But my focus right now is not on the don'ts. It's on the dos. And I think we'll find some dos. There's no guarantee to it, but 3LP has been doing this for a long time, as have others that we're working with, and they're optimistic as well.

Operator

[Operator Instructions] Our next question comes from the line of Steve Springer with Target Capital Management.

Steve Springer

Jeff, I appreciate your comments in response to Phil's questions. They are -- I was preparing a question along those lines, and I'd like to ask you, when you were in negotiations with Qualcomm some years ago, what was the size of the offer that they made to license ParkerVision's technology?

Jeffrey L. Parker

So Steve, the number that has been publicized that is in public documents that I can talk about is they had calculated based on their own future use of the technology based on not the royalty structure that we had offered but the royalty structure that they were thinking of, that it was in the range of $635 million to $600-and-some-odd million, depending upon the -- they kind of had a range of most likely and best case kind of thing. That was based, of course, on 1999 forecasts of where the mobile handset market was going to go, and that was kind of the net present value calculation that they had created to say to us, "Look, based on our proposal to you, this is what we think the value of this license is, based on what we're willing to pay you guys for royalty."

Steve Springer

So that was a net present value, which means that the total aggregate value was substantially larger?

Jeffrey L. Parker

I don't know what their discount was off the top of my head, but yes.

Steve Springer

Okay. So that they were willing to offer you that amount of money at that time, long before many of the other applications had been developed that presumably the technology is being used for over the last 14 years, it would seem to -- it would be very difficult to assume that they are not willfully, willfully infringing, is that not correct?

Jeffrey L. Parker

Well, okay, so let me make 2 comments. One comment is they haven't been using the technology over 14 years. But yes, our discussion with them goes back to a starting point in '98, but their usage of it starts in 2007, and our litigators may have found some other dates. I'm not familiar with it, but it may be a little earlier, okay? In terms of the willfulness, in order to prove willfulness, you have to show that somebody knew they were using a patented technology or innovation and that they knew that the patents existed at the time that they started using it. I've asked our litigators, how do they feel about their ability to prove willfulness? And they told me they feel extremely strong that they will be able to do that. I can't go into any more details on that. Those facts will come out during the trial. But McKool Smith feels very strong that they will be able to prove willfulness in this case.

Steve Springer

Yes, I mean, one would have to -- for them not to be willful, not to be knowledgeable about it, they're going to have to play the stupid card, they were so stupid that they didn't know, which doesn't sound very credible. In any event, willful infringement would qualify you for treble damages, is that correct?

Jeffrey L. Parker

Yes. So if you can prove willfulness, then the judge can increase what the jury awards by up to 3x. Now let me give you the caveat that our litigators have given me, which is that in large awards, it's unusual to see a trebling of damages. It's not unusual to see an increase of some nature, and I don't want to make a speculation of what that could be. They think it could still be very significant. But it wouldn't necessarily be 3x.

Steve Springer

Okay. And my last question, Jeff. In your discussions with your attorneys who have extensive experience in this field, given the size of Qualcomm, given your previous statements that you believe that this technology has effectively migrated to many other companies, at what point do you think Qualcomm sees a potential number that could be awarded to you from them that would cause them, and I know this is pure speculation but I'd like you to speculate, with that -- a number that would cause them to sit down and say, "Look, we're going to have to talk to these people." I mean, clearly, if it was $50 million and it's Qualcomm, they'd say no. They'd probably just ignore you, brush you aside forever, and it would take another 10 years. But at some point, they're going to sit down. Have they indicated to you what they think that sort of number might be?

Jeffrey L. Parker

No, we don't have an indication, Steve. But we'll have a mediation with them sometime between now and the early part of May. May 6 or earlier will be our first mediation with them, which is ordered by the court. And so maybe we'll get some clues. I think the most -- I think the closest anecdotal evidence I can point to that would relate to your question is the fact that they have, in the last couple of financial reports as a public company, listed us as a contingent factor -- contingent liability in their financial reporting. I don't know what exactly that number has to be, but somebody there calculated the number. And since we're in their Qs and Ks, we're obviously now visible to their senior management. I'm assuming that just as any public company, that senior management and possibly the Audit Committee of the board reviews Qs and Ks before they are signed off on. So at least we know we're visible at that level at Qualcomm. I believe that we'll see some traction from some of the other things we're doing beyond our Qualcomm litigation. Maybe that can be an influence, Steve. I don't really know. But look, the reason we have a federal court system is because there are rules. We're all supposed to live with those rules. Assuming we prevail in October, and there's no settlement before then that the parties can agree on, there are all kinds of remedies that can occur. Injunctions can be placed. I mean, there's all kinds of things the courts can do. So look, it would be great if ParkerVision and Qualcomm can find common ground and settle our differences and move on, and who knows, maybe even work together someday. You never know. I'm never willing to say never. Anything is possible. But I can't really tell you at this point what that tipping point would be. We'll have to wait and see.

Operator

I have no further questions in the queue at this time. I'd like to turn the conference back to Mr. Parker for any closing remarks.

Jeffrey L. Parker

Well, folks, listen, thanks for attending today. I think that when I was preparing for this call and I looked at really all that has happened here over the last year, there has been a tremendous amount of progress. And I know for a number of you who've been invested with us for a number of years you would like to see some of that progress in more tangible form that goes to a P&L, mostly on the P, less on the L side, and we're all with you. But I do think that these events and milestones will be achieved. We're definitely moving us towards that direction, and we hope you'll continue to be plugged in and supportive. And thank you so much for your past support, and we'll be talking to you again soon. Have a good day. Bye-bye.

Operator

That does conclude today's conference. If you wish to access our archived audio cast replay of this call, you may do so by visiting the company's website at www.parkervision.com. Thank you.

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