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  • Rovi Corporation: Where From Here? [View article]
    Good summary of the challenges Rovi faces on the patent front. In our estimation, Rovi investors need to be more diligent in ever in terms of scrutinizing the company's licensing approach and execution. This is a time for Rovi to be more transparent with investors, rather than less. An easy example. Rovi announced after losing the NFLX case that it would be scouring its portfolio to identify patents less susceptible to an Alice challenge. They should identify at least a few examples of such patents publicly. There are other steps the company can take to support investors as well. There is no doubt their patent portfolio is on shakier ground than ever. Let's see what the company does to return to firmer footing.
    Aug 18, 2015. 10:17 AM | 1 Like Like |Link to Comment
  • Vringo Sends Strong Message To SCOTUS And Google With Writ Of Certiorari And Why Shares Could Pop [View article]
    Investors should be mindful that the Teva decision was made in the context of claim construction. Whether or not the Supreme Court extends it exhortation to the Federal Circuit to be more deferential to factual findings in the context presented by the IP Engine (VRNG) case - obviousness - remains to be seen. Importantly, the "common sense" rhetoric employed by the CAFC panel actually stems from an earlier Supreme Court opinion, KSR v. Teleflex, that addressed the issue of obviousness directly. As with any complex legal situation, investors should be mindful of the full scope of the issues presented. We will learn soon enough whether VRNG's arguments have enough traction to beat the odds and get the Supreme Court to review the CAFC decision.
    Jun 2, 2015. 12:01 PM | 8 Likes Like |Link to Comment
  • Will Bass's Patent Challenge Set Forward Pharma's Tecfidera Royalties Dreams Back? [View article]
    There is nothing to explain. We have a policy of full disclosure regarding any positions we hold, and extended that to disclose Perdix's current short on FWP. We do not trade for Perdix, but do provide consulting and other services to the company, as we do for other buyside clients. In our view, Bass' attack on the '514 Patent presents a challenge for FWP's patent monetization plans. We find it telling that neither the company, nor analysts covering FWP, have disagreed with our analysis thus far. We imagine that they are considering the different options available to them in light of this complex situation.
    May 17, 2015. 12:51 PM | Likes Like |Link to Comment
  • ParkerVision down 40.6% on heavy volume [View news story]
    Yes the oral argument recordings should be available shortly. This morning's action is clearly tied to sentiment arising out of the appeal arguments.
    May 8, 2015. 12:50 PM | 1 Like Like |Link to Comment
  • Qualcomm: The Enemy Of My Enemy May Not Be My FRAND [View article]
    Steve: I think you raise an interesting question. If Qualcomm’s historical licensing practice is much more established than Motorola’s, and if it has consistently received an established royalty applied to the licensee’s end-product, then will that established rate-regime effectively determine its FRAND obligations going forward? If the Ninth Circuit does adopt the Washington District Court’s approach to this issue (which remains an outstanding question), then Qualcomm’s established licensing history will undoubtedly weigh in its favor in a way that Motorola’s history did not. However, in our view, that is unlikely the end of the inquiry. Part of Microsoft’s broader argument is that SEP-patent holders have not simply agreed to offer their patents at rates they have charged everyone else in the past. They have also promised to offer their patents at rates that do not frustrate their FRAND obligations. To the extent those obligations seek to avoid patent-holdup and royalty-stacking, in exchange for wide-adoption of the standard, then simply showing that everyone else has agreed to a certain rate-regime may not be enough for companies such as Qualcomm, Nokia or Ericsson to demonstrate those rates are FRAND-compliant (to the extent they are challenged). That appears to be part of the District Court’s reasoning. Patent-holdup and royalty-stacking are undoubtedly policy considerations. But to the extent those policy considerations were implicit in the quid-pro-quo between Qualcomm and the SSOs in the course of adopting a certain technology as the standard in exchange for FRAND commitments, then they may work their way into the contractual or good faith interpretations of those commitments. Therein, in our view, lies the risk to companies such as Qualcomm, Nokia and others that derive substantial revenues from licensing SEP patents, and this is why the upcoming Ninth Circuit decision may (or may not) shed light on this issue in a manner that increases that risk.
    Apr 18, 2015. 01:00 PM | 1 Like Like |Link to Comment
  • Qualcomm: The Enemy Of My Enemy May Not Be My FRAND [View article]
    Steve: Thank you for the clarification to your question. In the course of determining the supposed “true” royalty rate, one of Motorola’s primary arguments was that its prior licenses (prior history) should dictate whether its offers to Microsoft were “reasonable” under its RAND obligations. Those prior licenses purportedly more closely approximated the rates that Motorola offered to Microsoft. Thus, as you suggested, Motorola did in fact insist that, rather than a modified Georgia-Pacific analysis, its prior licenses were the best evidence of whether it breached its RAND obligations. Yet, in effect, that’s what the Court did. Except, it found the industry custom and practice reflected in third-party patent pool licenses for the same standards (802.11 and H.264) even though Motorola was not a party of those pools. The Court rejected Motorola’s prior licenses as “comparable” to the “true” RAND royalty rate. It did so for numerous reasons. The principal reasons were that those prior licenses involved different patents (even if they included some of the same patents licensed to Microsoft), or they were negotiated in the context of litigation (rather than an arms-length RAND negotiation.) In effect, the District Court determined Motorola's prior licenses were not historically comparable. Moreover, the appellate briefs do not reflect that Motorola argued that negotiated royalty rates for SEP patents by other parties (such as Nokia or Qualcomm) should determine whether its offers to Microsoft were reasonable. Finally, Microsoft disputed that there was, in fact, any historical evidence of Motorola or any party receiving 2.25% per product as offered by Motorola—at least with respect to the specific standards offered. Apparently, Motorola never received those rates for the patents that it offered to Microsoft (that was a hotly disputed issue of fact). In effect, the District Court did look to industry practice (whether you call it contract interpretation or modified-Georgia Pacific) but found that industry practice existed in the form of third-party patent pools that licensed the same standard for much less, not in the form of 2.25% per product as claimed by Motorola. Obviously, Motorola claims that was error.

    Microsoft’s allegations involved breach of contract, but its primary allegation was breach of the duty of good faith and fair dealing in the course of honoring its FRAND obligations. Those ultimate determinations were put to the jury, but only after the District Court determined—in a bench trial—the supposed “true” RAND rate. Motorola argues in its appeal that by allowing the jury to see the Court's RAND Determination, the Court prejudicially stacked the deck against it, and was accordingly error. In effect, Motorola’s appeal does not only challenge the RAND determination itself, but also challenges as error the Court’s determination that a jury-trial on Microsoft’s good-faith claim requires a pre-requisite finding as to the “true” rate under Georgia-Pacific. This argument has traction—a determination of whether someone acted in bad faith does not necessarily first require determining what would constitute good faith. There is the possibility that the Ninth Circuit does not reach the RAND determination at all in its decision, but decides that the District Court error on this ground alone warrants a new jury trial on the good-faith question, where the Court’s RAND determination is not admitted into evidence. Part of the problem for Motorola, however, is that it appears to have consented to a bench trial to determine the “true” RAND rate (although the parties dispute that.) We hope this clarifies your good questions. Please feel free to contact us with further questions.
    Apr 18, 2015. 10:13 AM | 1 Like Like |Link to Comment
  • Qualcomm: The Enemy Of My Enemy May Not Be My FRAND [View article]
    It is indeed a contract provision and should be interpreted as such. For instance, in the Qualcomm case the relevant standard body is ETSI. Accordingly, ETSI's IPR policy ( should be interpreted according to French contract law. With respect to what constitutes FRAND, the "market rate", or comparable license rates granted to other licensees is indeed one small factor that goes into determination of what FRAND is. However, it is weighed against more important factors that push the overall rate down, e.g., royalty stacking problem. Furthermore, those prior licenses are all different in nature and hardly comparable since some of them take into consideration cross-licensing deals, others are results of settlement negotiations, etc. Also important is the fact that each of those licenses is typically renegotiated every 5 years, so each of the prior licensees will keep pushing the rate down. Armed with legal precedent, these device manufacturers will undoubtedly renegotiate the rates affecting Qualcomm's future licensing revenues.
    Apr 17, 2015. 06:30 PM | 2 Likes Like |Link to Comment
  • Qualcomm: The Enemy Of My Enemy May Not Be My FRAND [View article]
    ooey - We are not clear on what you are asking, but generally these licenses are all non-exclusive. So if one company does not utilize the technology their competitor, with a similar license, surely will. If you question is in regards to Qualcomm's ability to stop licensing their essential patents, then that would be a breach of their FRAND obligation.
    Apr 17, 2015. 01:46 PM | Likes Like |Link to Comment
  • Qualcomm: The Enemy Of My Enemy May Not Be My FRAND [View article]
    mullenjl - Thank you for your comment. First, this is not a "legal opinion" and should not be treated as such. Nor is it an investment advice. We are simply educating the market about other factors and risks that go into the formula of evaluating QCOM's future revenues. Second, your dissection of the letter is your own interpretation. Regardless, we believe Jana's motives should be questioned and evaluated constructively.
    Apr 17, 2015. 12:00 PM | 2 Likes Like |Link to Comment
  • Gilead Sciences Gets Ambushed By The Patent Troll, AbbVie [View article]
    Without getting into too many details, there are two forums that investors will need to monitor closely while tracking this situation. The first is the pending round of cases before Judge Sleet in Delaware. Both sides are extremely well-represented, and will spare no expense to pursue their respective claims. The second potential front is in the USPTO itself. Investors are already aware of GILD's battles with Idenix in the USPTO (and District Courts as well for that matter,) and it will be interesting to see if either GILD or ABBV elect to initiate proceedings in the USPTO in parallel with the pending court cases.

    This is a highly fluid situation that requires monitoring on all sides.
    Nov 13, 2014. 10:46 AM | 2 Likes Like |Link to Comment
  • WATT? 'Be Prepared To Lose All Of Your Investment' [View article]
    Investors need to keep an eye on the 37 patent applications that the S-1 say are on file. Having no issued patents could be a challenge for WATT moving forward, and investors need to be informed about the company's patent positioning.
    Jul 30, 2014. 12:44 PM | 2 Likes Like |Link to Comment
  • ParkerVision: Investors Need To Watch Both The Courts And The USPTO Over Next 18 Months [View article]
    Fourth IPR filed by Farmwald/RPX team targeting last patent from original PRKR v. QCOM trial. Further confirms the importance of PRKR successfully navigating both the IPR process and the Federal Circuit review of the District Court trial.
    Jul 3, 2014. 08:46 AM | 1 Like Like |Link to Comment
  • Expected Decision In Avanir Nuedexta Patent Litigation [View article]
    Today's action in AVNR highlights the importance of full and complete due diligence on patent issues, as discussed in our comment above.
    Apr 30, 2014. 03:22 PM | Likes Like |Link to Comment
  • Unwired Planet: A Stay In The Google Case May Disrupt The Damages Claim [View article]
    IPR's and CBM's were instituted against all three of the patents challenged by Google in the USPTO. This situation requires further monitoring as those proceedings unfold.
    Apr 10, 2014. 09:38 AM | Likes Like |Link to Comment
  • Unwired Planet: A Stay In The Google Case May Disrupt The Damages Claim [View article]
    IPR's and CBM's were instituted against all three of the patents challenged by Google in the USPTO. This situation requires further monitoring as those proceedings unfold.
    Apr 10, 2014. 09:38 AM | Likes Like |Link to Comment