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To: Clarksterh who wrote (42589)	9/27/1999 10:54:00 AM
From: D.J.Smyth	Respond to of 152472

clark, ot, "Licensing and strategic partner revenue for the three month period ended June 30, 1999 includes $7.9 million in new licenses, $3.8 million related to development efforts for Nokia and Samsung Electronics Company, Ltd. ("Samsung"), and $208,000 in recurring royalties...$208K is not a lot given that PDC and PHS are still pretty big in Japan, and there are so many licensees." i agree. it was very puzzling at first too. but, pray tell, there are several factors for this. one factor is if you had the opportunity to review the agreements (I have not personally done so, and this information is distributed by individuals abroad who state they know some who have) you note that IDC signed royalty and upfront payments from the licensees based on TDMA and GSM IPRs which were not in current contention; although 089 and several others (have their own Asian counterparts) were not in contention in Asia, they were treated in a manner which gave the ERICY weight relative to future payment. the companies IDC signed also had agreements with ERICY regarding certain infra supply items; so conflict of interest arose in this regard. the MOT case obviously didn't help, the the German decision along with patents in Asia has helped persuade several Asian licensees to honor them to an extent. the current terms of the agreements call for a reworking of current and past dues as more IPR settlements come to light (including ERICY I presume). For this reason ALL Asian parties have not come to the table yet (including SONY, for example relative to their infra supply chain). My personal thinking, based on this information, is if the ERICY and MOT cases were not playing on the Asian agreements, you'd have seen many more Asian parties sign agreements, and quickly. The revalidation of 089 in the US (apparently Asian disputes are handled differently) and proposed claims 16 through 22, will eventually show the community (i think) how strong IDC's TDMA/GSM IPRs (prior art) really are. (another factor, as it appears to me personally and through conversations abroad, was that in order to get a couple large Asian licensees to sign, IDC agreed that PHS sales by those firms to DoKoMo (NTT) for distribution would only be paid 5% IPR on handsets sold outside of Japan. However, the current Denso and Japan Radio agreement pays royalties on ALL handsets both in and out of Japan. I believe JRC sold nearly 200K handsets to NTT in the twelve months, with that number projected to increase. So, IDC's future PHS based royalties through DDI - Kyocera and JRC (among others) will begin to subtstantively increase in the next twelve months (according to their one analyst anyway) as agreements are reworked and current upfront payments come to an end and royalties begin.) several firms that have been holding back are expected to agree in some form as the revalidation of 089 was apparently very meaningful. when they settle the ERICY case in a meaningful way (i personally think they will), it will be, in effect, like dominoes. this is all information given to me, and i have little reason to doubt most of its substance. there is much more, many other factors.

To: Clarksterh who wrote (42589)	9/27/1999 4:38:00 PM
From: Jim Lurgio	Read Replies (1) \| Respond to of 152472

Clark, Many of the agreements contained a lot of money up front for future royalties. As the front money is used up then the recurring revenues will go up. MK has predicted a considerable increase in the 3rd and 4th q of 1999 and a doubling of these types of revenues for 2000 because of this reason. Below are several old news releases relating to licensing. As you can see they aren't restricted to PHS. DJ 01/06 1157 InterDigital Unit Licenses Mobile Phone Tech To Matsush TOKYO -DJ- InterDigital Technology Corp., a unit of InterDigital Communications Corp. (IDC), reached an agreement with Matsushita Electric Industrial Co. (MC) to license its mobile phone/car phone technology to the Japanese company, a Matsushita spokesman said. But the spokesman, citing a non-disclosure clause, declined to give any details on the agreement, which covers InterDigital's time division multiple access and other technologies. A report in today's Business & Technology newspaper said Matsushita, under the agreement, will pay InterDigital $20 million in royalties for the technology. (END) DOW JONES NEWS 01-06-95 OTC 03/02 1000 INTERDIGITAL ANNOUNCES NEW PATENT LICENSE AGREEMENT KING OF PRUSSIA, Pa., March 2 /PRNewswire/ -- InterDigital Communications Corporation (AMEX: IDC) announced today that its subsidiary InterDigital Technology Corporation ("InterDigital Technology") has entered into a worldwide, royalty-bearing patent license agreement with a leading Pacific Rim developer, manufacturer and distributor of analog and cellular digital telephones, including phones that utilize Time Division Multiple Access (TDMA)-based worldwide standards. Under the agreement, InterDigital Technology will receive a royalty advance of approximately $15 million and additional royalties on various types of digital wireless telephones including those built in accordance with the TDMA-based IS-54, IS-136, GSM, DCS-1800/1900 and other standards once the prepayment is fully utilized. Robert S. Bramson, President of InterDigital Technology, stated, "We are especially pleased to have entered into this additional license agreement." InterDigital develops and markets advanced digital wireless telecommunications systems using proprietary technologies for voice and data communications. InterDigital Technology holds and is the licensor of an extensive patent portfolio on TDMA and Broadband-Code Division Multiple Access (B-CDMA) technologies. /delval/ -0- 3/2/95 /CONTACT: Susan Sutton of InterDigital Communications, 610-278-7800/ (IDC) CO: InterDigital Communications Corporation ST: Pennsylvania IN: TLS SU: LIC utive News Svc. KING OF PRUSSIA, Pa., May 9 /PRNewswire/ -- InterDigital Communications Corporation (AMEX: IDC) announced today that its subsidiary InterDigital Technology Corporation ("InterDigital Technology") has entered into a royalty bearing license agreement with NEC Corporation covering the manufacture, use and sale of TDMA based subscriber units and infrastructure equipment. Under the agreement, InterDigital Technology will receive a royalty advance in excess of $20 million and potential additional royalties on digital wireless telephones and infrastructure equipment built in accordance with the TDMA based IS-54, IS-136, GSM, DCS-1800/1900, PDC and PHS standards. The advance payment is due on May 25, 1995, and is irrevocable and non-refundable. William J. Burns, Chairman of the Board of InterDigital Communications, stated, "We are pleased that InterDigital Technology has entered into this important new license agreement with NEC." InterDigital develops and markets advanced digital wireless telecommunications systems using proprietary technologies for voice and data communications. InterDigital Technology holds and is the licensor of an extensive patent portfolio on TDMA and Broadband-Code Division Multiple Access (B-CDMA) technologies. OTC 02/06 0932 INTERDIGITAL ANNOUNCES LICENSE AGREEMENT WITH ... KING OF PRUSSIA, Pa., Feb. 6 /PRNewswire/ -- InterDigital Communications Corporation (AMEX: IDC) announced today that its subsidiary InterDigital Technology Corporation ("InterDigital Technology") entered into a worldwide, royalty-bearing patent license agreement with Sanyo Electric Company, Ltd. Sanyo is a leading developer, manufacturer and distributor of consumer electronic products including Time Division Multiple Access (TDMA)-based digital wireless telephones. Under the agreement, Sanyo will pay InterDigital Technology $2.75 million on or before February 28, 1995, as a royalty advance and has agreed to pay a royalty on various types of digital wireless telephones including those built in accordance with the TDMA-based IS-54, GSM, PHS and PDC standards. Robert S. Bramson, President of InterDigital Technology, stated, "We are pleased to have Sanyo, with its worldwide reputation and market presence, as the newest licensee under our TDMA patents." /delval/ -0- 2/6/95 /CONTACT: Susan Sutton of InterDigital Communications, 610-278-7800/ (IDC) CO: InterDigital Communications Corporation; Sanyo Electric Company, Ltd. ST: Pennsylvania IN: TLS SU: LIC