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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: BarbaraT who wrote (53068)	12/29/1999 12:01:00 PM
From: Lone Star	Respond to of 108040

Let me try this... \| Home \| Register! \| Community \| My Bull \| Login \| Logout \| RT Quotes \| Interdigital Communications (IDC) Message List Raging Portfolios - Track your stocks here New! Real Time Quote Chart Free E-Mail Raging IDC Links < Previous Respond Next > By: perplexed Reply To: None Wednesday, 29 Dec 1999 at 10:57 AM EST Post # of 23958 The Capsule IDC Story: As IDC says, ?I don?t get no respect!? Tiny Interdigital Communications (IDC), a developer of wireless telephones for the last twenty years, may just now be on the verge of changing this lament. In the past week the company?s stock (listed on the American exchange) has doubled on outsize volume. After languishing for several years in the $5. range it has moved up in the month of December from $ 5 to a high of $28, and is presently selling at $25. Sales volume has grown from a daily average of $300,00 to over $1,500,000 shares. Why has this almost penny stock company suddenly become a player in the high flying telecommunications industry? Short history lesson: In the early nineties IDC was making good progress (if not profits), creating a fixed wireless system in which the telephone has a fixed location such as in one?s home or office, but it sends its? messages via radio waves to remote relay stations which then forward them to their final destination. It named its? product Ultraphone, and it was based on technology they had patented called TDMA (Time Division Multiple Access). After they had booked some orders for Ultraphone, they discovered that Motorola (MOT) was using their patents to manufacture a competing product without offering to license or pay royalties to IDC. When IDC confronted them, big MOT unleashed their legal muscle. They charged in federal court that IDC?s patents were not based on novel ideas so they could be ignored, and even if the patents were valid, they argued that their technology was different. So here comes the classic David and Goliath battle. Cash strapped IDC was stopped in its economic tracks. After years of legal jousting, the case was finally tried by a jury that didn?t know the difference between an house phone and a cell phone. In the middle of their deliberations they sent a request to the judge to explain this to them. So in 1995 the jury found MOT had not infringed IDC?s patents, and whether or not the patents were valid did not matter. MOT was home free to sell TDMA telephones and ignore IDC. As soon as the decision was announced, IDC?s collapsed from about $12 to $6 dollars. Institutions stampeded to pulled out their chips before the retail rush unloaded. IDC was devastated. Its people went into a deep moral and economic depression. There the company?s fortunes languished for several years shifting between $3 and 5 . End of story? Not quite. After limping along and barely managing to keep its doors open, IDC managed to induce several other manufacturers, notably Alcatel, Siemens, and Samsung - to invest in their fixed wireless loop research. But in 1998, these companies decided that IDC?s fixed wireless system was a lost cause and they stopped supporting IDC. Again IDC was an orphan, shunned by Wall Street . Even so the IDC scientific team - about 150 technicians - kept plugging away. They managed to develop important building blocks in a new phone system technology called CDMA (Code Division Multiple Access). And they filed more new patents to protect this work. They now hold 800 patents all around the world. In 1986 a strange event occurred. In an unrelated patent litigation, another federal patent judge decided that often legal patent issues are so complicated for juries and even judges to understand that it made sense to appoint an expert ?special master? to determine the validity of contested patents, allowing juries to decide only collateral infringmen issues and the size of money damages. This is now referred to as the ?Markman? decision. ?Markman? marked a rebirth of hope for ICD. Remember MOT had escaped, not because the patents were ruled invalid but simply because the jury decided MOT was not using them in the millions of phones it had sold worldwide. The big MOT fish had escaped, but there were other fish to fry. Another very BIG FISH named Ericsson (ERCY). They also had sold many millions of TDMA phones without buying a license or paying royalties to IDC. Off to the courthouse again. This time IDC selected Fullbright and Jawarski, a highly respected Texas firm as its lawyers. F and J must have liked IDC?s prospects because they took the case on a contingent basis, a legal term for ?no win no fee?. After the lawsuit was filed, F and J and IDC decided to ask the patent office to reexamine and revalidate the same patents that were challenged by MOT. That was three years ago. The case has been held in abeyance awaiting this patent office review. Finally this month the company issued a release saying that the patent office notified them that their patents were solid, thereby putting ERICY at serious risk, because they may owe substantial royalties on millions of handsets. So far not a peep out of ERICY. In the meanwhile ERICY?s fortunes have been floundering, and the heat is on. Meanwhile back at the farm, IDC has experienced a new birth of hope for two other good reasons: 1) Early this year Nokia, largest phone manufacturer in the world, entered into an alliance with IDC to develop a third generation handset based upon broadband CDMA technology, for which IDC has many patents. Nokia is funding this work to the tune of seventy million dollars. And IDC will be allowed to use and license to other companies whatever technology it creates. 2) IDC has recently announced that the wireless international standards committee sponsored by the United Nations has approved third generation wireless handset standards for both CDMA and TDMA technologies, and that IDC holds integral patents in both standards. So far only one regional investment firm, Morgan Keegan, has recommended purchase of IDC. But that is not to say that financial institutions have not begun to buy in. It appears that they recently increased their holdings from less than 30 to 40% of the outstanding stock, some 50 million shares. In addition management appears to control about 20%. Possibly large private owners represent another 10%, which would leave a float of approximately 15 million shares. At the present rate of trading this adds up to 10 days of activity. Interdigital is now referred to by its supporters as the ?baby Qualcom?. Their ?no respect? problem may soon disappear. Raging Bull Advertisement - Bulls & Bears agree on Dell home computers. BoardMark MemberMark Ignore Poster Report TOS Violation IDC Update Last 27 Chg. +3 29/64 % +14.59% Time 11:34:00 Detailed \| Real-Time Nasdaq delayed 15 minutes, 20 min. otherwise. Previous \| Next \| Post New \| Respond \| View Replies E-Mail this post to a Friend! New! 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