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John H. Ford
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For the past 30 years, I have been involved in startups, as a founder, and active investor. My first company was purchased by Johnson & Johnson, which set the foundation for future investments. My level of trading escalated after graduating from college, primarily as a result of my... More
  • It Looks Like Apple Wants To Settle With Virnetx 4 comments
    May 30, 2012 10:28 AM | about stocks: VHC

    Here is an interesting video featuring Tim Cook, speaking about the current patent wars.

    Just scroll down to the patent war video.

    First off, Cook states that all he wants is fair and reasonable royalty rates, and then he goes on to say: "If we can find a way to settle this."

    After watching the video, I reached the following conclusions:

    One: Tim Cook realizes Apple is infringing on Virnetx patents.

    Two: He is willing to pay fair and reasonable royalty rates.

    Three: He would like to settle.

    We know Apple and Virnetx are in settlement negotiations right now, and it appears that Virnetx is holding firm with the companies established royalty rates, and Apple is trying to get a lower rate. That's all part of a normal negotiation process, and I expect Virnetx will ultimately prevail.

    I don't expect Apple to go to trial. I think the company realizes it's vulnerable position and will settle sometime between now and the court date. Or, as I stated before, Apple may buy Virnetx.

    I do not agree with Cowen, who believes that there will only be one settlement between now and the court date. I expect more than one settlement before the trial, if there even is a trial. If Apple settles before the trial, I believe all the other defendants will settle promptly.

    Disclosure: I am long VHC.

    Stocks: VHC
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Comments (4)
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  • singletrackrider
    , contributor
    Comments (42) | Send Message
    care to elaborate on how you came to those conclusions? I think you're extrapolating a great deal from his comments.
    30 May 2012, 10:55 AM Reply Like
  • John H. Ford
    , contributor
    Comments (84) | Send Message
    Author’s reply » Which extrapolations are you questioning?
    30 May 2012, 05:36 PM Reply Like
  • CKtalon
    , contributor
    Comments (3) | Send Message
    Also, I quote "there is NO way you can design a product...whatever this is", which means there is no way around the patent, and AAPL knows that.
    31 May 2012, 12:40 AM Reply Like
  • Limestoner
    , contributor
    Comments (2) | Send Message
    Cook, like Steve Jobs, is a master at talking out of both sides of his mouth. He wants FRAND pricing (or lower, preferably much, much, lower ...) on patents that they can't blatantly steal, and for which they are being sued for infrigement, but he'd just as soon hold a monopoly on any patents held by Apple. Nothing's changed at Apple; it's "Screw the competition, any way we can".
    31 May 2012, 11:27 AM Reply Like
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