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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: waitwatchwander who wrote (59081)	1/25/2007 8:57:09 PM
From: JGoren	Read Replies (2) \| Respond to of 197351

I had a chance to speak with my broker about the option and he had some thoughts that got us thinking and we figured it out. The license ends April 9, 2007. NOK has an option to renew the license on the same terms that expires at the end of 2008. That gave NOK the ability to see if it could do without Qcom but the assurance that it could jump back on the boat within a year and 8 months. There is no royalty due between April 10, 2007 and the end of 2008. But, NOK can't infringe during that period of time. If it does, its subject to a suit for infringement. Remember, several months ago, NOK said that it was stopping cdma and took the position that it would not infringe. From Qcom's perspective, back in 2001, if NOK wanted to try to do without a license, so be it. Let it take the risk, which Qcom probably felt pretty confident NOK would be unable to go forward without a license. Qcom still retained the right to sue for infringement. Thus, NOK's new position that Qcom can't sue for infringement under FRAND under the theory that Qcom has to issue a new license at the royalty rate NOK wants to pay. In other words, from Qcom's point of view in 2001, the gap between the expiration in 2007 of the license and expiration of the option to renew is not that bad. We now turn to the litigation. NOK wanted the court to agree with its position that Qcom cannot obtain an injunction because it agreed to FRAND. However, that would be an advisory opinion. There are several steps necessary to get to that question. First, patents have to be identified that are alleged to be infringed. Second, infringement has to be proven. Third, the court addresses the question of remedy and whether there is irreparable injury, etc. on which to base an injunction. NOK wanted the court to skip all those steps. The court said no and told NOK, it has to admit that it will use specifically-identified patents after April 9, 2007 and such use would infringe on Qcom's patents. As I said earlier, the court rejected NOK's one-way street approach where there was no mutuality. If NOK admits what the court requires in order to get the court to address the question, it opens the door for Qcom to counter on infringement and NOK has already admitted Qcom's case! The above description makes sense of both NOK's pronouncements and Qcom's statements about the situation. It harmonizes what Altman said about the April 9, 2007 date and everything else I can remember. Altman is correct that as of April 10, NOK has no license and would be subject to an infringement action (even if it later exercises the option to extend the license). Why the difference between GSM and wcdma claims? There is no license for GSM so they are not covered by an expiring license agreement. Thus, NOK's defense does not apply. With respect ot wcdma, that IPR was covered by the license agreement and the FRAND agreement.