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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: Harvey Rosenkrantz who wrote (7)	7/22/1999 2:14:00 AM
From: JGoren	Read Replies (1) \| Respond to of 13582

It's important to see the pleading, all the allegations. Suing the Q for infringement of patents, which MOT licensed to the Q, might result in a finding of a frivolous suit by MOT, award of attorney fees and sanctions, but it does not appear sufficiently and directly related to a breach of the agreement granting patent licenses to MOT to cause a right to terminate. For example, failure to pay proper royalties (particularly if there were a fraudulent understatement of the amount to be paid) to Q could be direct enough to justify terminating the patents. Sounds like an uphill battle for Q as to obtaining a termination. Second, Qcom wants to terminate license to MOT but keep licenses granted to it, apparently in the same agreement. This is generally not available, since one generally has to take a contract as a whole; one can't take benefits and jettison burdens of a single contract. If Qcom does not need MOT patents, then if MOT breached the contract by suing Qcom for infringement of patents that MOT licensed to Qcom, the court permit the whole contract to be terminated. Somewhere I saw an article quoting a Qcom source saying something to the effect that MOT needs to understand the downside of suing Qualcomm. This is the key; raise the stakes. If there is any possibility that MOT might be out of the cdma business, MOT has to think twice. General rule for any defendant is to counterclaim to raise the stakes for the plaintiff. Now, Qcom has affirmative claims on which it can conduct discovery and find any violation of the contract by MOT. If it finds violations in regard to the patents granted to MOT, then the chances of termination rise. The counterclaims appear tactical. End result of the lawsuit may be settlement with a renegotiation of the 1990 license agreement. If someone on the thread can get the pleadings on both sides and analyze the patents involved, we might be able to figure out MOT's chances. Remember, this suit started when MOT wanted to stop the Q-phone from going to market and alleged trade dress infringement. MOT was unsuccessful in obtaining a preliminary injunction. MOT did not have a competing product until recently, and now that the StarTac is on the shelves, it has its own problems and the Q is going off the market. My impression, and that is all it is, is that the patent infringement claims were added on to bolster MOT's case. If Q is correct that it has licenses, MOT is left with little, if anything. I somehow doubt that Qcom would allege that the alleged acts of infringement were covered by the license MOT granted, if that were not true.

To: Harvey Rosenkrantz who wrote (7)	7/22/1999 2:22:00 AM
From: Maurice Winn	Read Replies (2) \| Respond to of 13582

A Qualcomm spokesperson said that the legal action against Motorola was essentially a shot across Motorola bows because Motorola continues with their unreasonable litigation so Q! is seeking dissolution of the 1990 agreements. JGoren is right, it was "...understand the downside...". Qualcomm acts in good faith in commercial agreements and will use legal action to defend their business when attacked. There have been several attacks, none of them successful though they have extracted some minor payoffs, such as the few million Interdigital gained. Ericy probably gained a bit [very little from the outcome] of negotiating leverage with their unsuccessful legal action. The outcome seems likely to be a stand down of both actions. Then again, Qualcomm could benefit hugely by Motorola breaching the agreement of 1990 and thus releasing Q! from the absurdly low royalty rates of the time and even a royalty sharing arrangement. Motorola will have to pay the 'fair and equitable' rates that cdmaOne and cdma2000 licensees are having to pay. Namely, something around 5%. Mqurice PS: Ramsey started a thread way back at the beginning of 1996 but he was talking to himself and it died. I started "CDMA The Market Test" which ran for 9 months. "Coming into buy range" had a long and reputable innings. Good luck with the S&P500 thread Ramsey. Q! has come a long way. But the fun has just begun.

To: Harvey Rosenkrantz who wrote (7)	7/23/1999 8:59:00 AM
From: quidditch	Respond to of 13582

MOT Litigation: Trade dress infringement/Pantech: Q may or may not have a smoking gun in terms of MOT's subcontracting for ASICs and failure to note Q on packaging; there may be other royalty reporting or patent infringement issues. Unless there is commercially probative, clear evidence that the Q can use in a mortion declaratory judgment (or even in a motion for equitable relief), this is an action that will drag and drag on, without much immediate impact, if any. It is not necessarily in Q!'s interest not to have MOT in the CDMA phone business. It is in Q!'s interest to force a tactical renegotiation of the 1990 license--to do that, it needs powerful, irrefutable evidence of violations of the license and/or patent infringement, maybe even evidence of MOT's bad faith, before liklihood of legal remedies would force MOT to the floor. IMHO Regards. Steven