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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 177.78-2.2%Jan 9 9:30 AM EST

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To: Stock Farmer who wrote (75681)3/21/2008 4:52:12 PM
From: A.J. Mullen  Read Replies (1) of 197155
 
Stock Farmer, your analysis was thoughtful, carefully and patiently, explained, and very worrying. I apologize to all for my late response, but it all hinges on what proportional means.

It seems to me that you have adopted the mathematical definition, that if f(x)=y then f(2x) =2f(x). I understand your point that having set a ceiling on the value of the entire portfolio, then preservation of proportionality would require each individual patent must be valued at much less than anyone would otherwise think fair. On the otherhand I also get Slacker's point that Nokia accepted in the Vitelcom case that pricing was non-linear. That by definition means it is not proportional in the mathematical sense - not just that some patents are more valuable than others. I don't know if Nokia acceptance of non-linearity in another case can be used against them in this case, but I don't think it matters.

I just looked up proportion in my dictionary. (The Concise Oxford English Dictionary - JGoren and others may wish to stop reading here..) The mathematical definition is the fourth one given, another is Correct relation of one thing to another. The fifth definition is the most interesting to me:

v.t. Make (thing etc.) proportionate to (must proportion the punishment to the crime)

I think the requirement that the cost of IP must be proportionate is less strict than the formal mathematical definition. Punishment proportionate to the crime is a great example. Your suggestion that Nokia can subtract the cost of IP it doesn't use from the total cost for all IP is akin to a serial murderer appealing his death sentence. The punishment for killing, say, twice the number would be death too. He didn't kill the extra people, so the punishment for the uncommitted crimes should be deducted from his sentence, and he should walk free! I don't think the court will have a problem accepting a non-mathematical definition of proportionate.

Ashley
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