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Technology Stocks : Interdigital Communication(IDCC)

IDCC 345.76

+5.4%

3:59 PM EST

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To: w molloy who wrote (3567)	1/24/2000 9:03:00 AM
From: Jim Lurgio	Read Replies (1) of 5195

Although it's not much recurring revenues in the last quarter were 2.9 million versus 122,000 for the same period last year. Gus provided that earlier and it's in the SEC filing. Most of IDC's licensees paid up-front licensing fees in the 94/95 time frame, which wasn't a good idea, but it kept the company from going under due to the law suits with Mot and ERICY. New licensees such as Bosch paid a fee for previous usage but the New Year will produce on going revenues that will produce a steady flow and predictable earnings. None of us know how many licenses have matured but management has predicted a doubling of recurring revenues. On the legal issue IDC and the Q have had similar success with each only having one decision not going their way. Are you aware that IDC won a favorable decision in the German Appellate court and Siemens/Alcatel/Philips all withdrew from the appeal thus validating the patent? This suit also was 7 years long. IDC also was granted the same patent in Sweden under the protest of Ericy that's part of the suit in Texas. Many wonder why IDC hasn't taken action in Europe but I feel they hope to resolve all issues via the Texas suit. If not then action can be taken in Europe and a better case can be built by what was learned during the Texas case. If my thoughts are correct I think IDC made a good choice by following through here because as we know the user base is much larger in Europe than the USA and therefore much more is at risk. It's not a 100% but I find it hard to believe ERICY can come up with a credible expert witness that would be able to afford reasonable testimony of how the US patent office spent probably 6 years researching a patent and was wrong. The reexamination alone took two years. Legal minds tend to disagree with me and say when money is involved people we say anything. It's hard to argue that opinion. You pointed out the risk factors that the Q had and bottom line is you were right. I look at IDC and the only risk I see is a loss of the Ericy case that in my opinion would be another temporary set back like Mot. The company has plenty of money and only 200 employees and currently produces nothing besides technology. We may see it differently but I like the risk reward ratio. Have a good one Jim

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