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Technology Stocks : Interdigital Communication(IDCC) -- Ignore unavailable to you. Want to Upgrade?

To: Manx who wrote (3769)	2/6/2000 4:05:00 PM
From: Manx	Read Replies (1) \| Respond to of 5195

FROM RB: AT&T & IDC By: renntech Reply To: None Monday, 31 Jan 2000 at 9:54 AM EST Post # of 50020 AT&T article making reference to a 5% royalty. Thought I had posted this on Saturday. I have inserted a row of astericks just above the reference. Greg Aharonian Internet Patent News Service *********************************************************** Information Law Alert \|\|\|\|\|\|\|\|\| \|\| \|\|\|\| * a voorhees report * \|\| \|\| \|\| \|\| * * \|\| \|\| \|\| \|\| * 718-369-0906 * \|\| \|\| \|\|\|\|\|\|\|\|\| * voice * \|\| \|\| \|\| \|\| * 718-369-3250 * \|\| \|\| \|\| \|\| * fax * \|\|\|\|\|\|\|\|\| \|\|\|\|\|\|\|\| \|\| \|\| markvoor@phantom.com* ********************************************************* 411 First Street, Brooklyn, NY 11215-2507 May 13, 1994 IN THIS ISSUE JUSTICE TAKING CLOSE LOOK AT MOTOROLA'S RADIO DEALS Do Keiretsu-Like Relationships Between Supplier And Provider Violate Antitrust Laws? AT&T-INTERDIGITAL LICENSING DEAL CHANGES DIGITAL LANDSCAPE Industry Big Foot Decides That A Pesky Irritant Deserves Pocket Change. The $64 Question: How Much? Analog's D-Day HAYES MAY GO TO MAT ONE MORE TIME OVER MODEM TECHNOLOGY "The Patent Is Invalid," Says Penril's Lawyer WHY FEAR THE PHONE COMPANY? Antitrust Case Between Southwestern Bell And Directory Publisher Reveals Danger Of Monopoly INTERNET DEFAMATION SUIT:OLD WINE IN NEW BOTTLE Defendant Meeks Will Likely Have Same Protection As Traditional Print JournalistDDAnd Maybe More -------------------- AT&T-INTERDIGITAL LICENSING DEAL CHANGES DIGITAL LANDSCAPE Industry Big Foot Decides That A Pesky Irritant Deserves Pocket Change. The $64 Question: How Much? InterDigital Communications Corp., the Rodney Dangerfield of cellular communications, is finally getting some respectDDand making its competitors awfully nervous. The anxiety attack has been caused by InterDigital's licensing deal with AT&T Corp., in which it receives $2.4 million upfront for its digital cellular technology. The deal is InterDigital's first license in more than a year of trying. It gives the company much needed cash, instant cachet, and the confidence to push forward with patent suits in three courts. When AT&T Corp. signs a licensing deal, competitors get jittery, especially when it's a cash deal. After all, if the big foot itself can't find a way around another company's patents, who else can? A well-known high-tech lawyer recalls visiting AT&T on behalf of a client who wanted royalties from the company. The visitor mentioned the possibility of an infringement suit. His guest escorted him into a room of patent lawyers and politely said, "See this room. We'll devote all of them to the case." The two sides shortly worked out a cash-free cross-licensing deal. AT&T's willingness to pay cash to InterDigital, which has been long on promise and short on delivery of digital phone systems, stands the world on its head. As recently as three months ago, an InterDigital spokesman said the company would have to win an infringement case in court before licensing revenues began to flow. The license covers the two forms of digital communications that are now competing for market acceptance. One is based on squeezing calls into time slots (TDMA); the other relies on codes to achieve spectrum efficiency (CDMA). AT&T and InterDigital have agreed not to talk about the deal, and so it is difficult to know the details of their mating dance. But lawyers and engineers who have dealt with AT&T say it does not act precipitously or cavalierly. "AT&T is a sober, serious company when it comes to patents," says George Calhoun, a former InterDigital executive, who tried to sell a license to AT&T three years ago. The license "probably represents a vote of confidence. But it is a small step in a long war." So far, Motorola and Ericsson, the other two major cellular equipment manufacturers, don't show any signs of signing rather than fighting. Both of their suits to declare InterDigital's patents invalid are still on track. There are a couple theories about why AT&T acted now rather than wait on the sidelines. The cynical view is that InterDigital gave the company a long-term offer it couldn't refuse, even if there is an upfront payment. InterDigital needs cash badly. AT&T's $2.4 million will certainly come in handy. But the wording of the release announcing the deal leaves unclear whether the sum is a lifetime membership, or simply a down payment. The $2.4 million will be applied against future royalties, the release says, "if additional royalty payments become necessary" (emphasis supplied). ******************************************************** If that means AT&T is unlikely to pay more than $2.4 million and if InterDigital wins its court battles, AT&T is getting a bargain. From others, InterDigital is seeking 5 percent of sales of all cellular towers being installed in major markets and all digital handsets. It reportedly sought tens of millions of dollars upfront from Motorola. The more benign view is that AT&T is simply doing the right thing at the right time. Under this reading, AT&T has determined that InterDigital's work in both TDMA and CDMA was groundbreaking and deserves to be recognized. Moreover, AT&T could do well to burnish its reputation with customers. The Baby Bells are lobbying against the AT&TDMcCaw Cellular merger on the grounds that it will encourage AT&T to discriminate against the Baby Bells using AT&T cellular equipment. Since they say they are locked in to AT&T as an equipment vendor, AT&T could easily raise prices or withhold service, giving an edge to McCaw. By taking a license from InterDigital, AT&T is shielding the Baby Bells from any potential harassment and threats of infringement from InterDigital. In either case, AT&T did not act unknowingly. Its licensing deal last year with another small fry, Spectrum Information Technologies, backfired. Spectrum's bragging about the deal led to securities fraud litigation into which AT&T was sucked as a witness. It was an unseemly affair that hovered above the InterDigital negotiations as a reminder. Mindful of the confidentiality agreement, Robert Bramson, president of InterDigital Technology Corp., the licensing arm, won't make Spectrum's mistake. He says he is "tickled pink" but is careful about overplaying his hand. His work, he says, is only just beginning. "This is a three to five year process, and we're only a little more than a year into it," Bramson says. AT&T's $2.4 million alone won't get the company all the way there.