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

To: ohohyodafarted who wrote (59130)	1/26/2007 10:19:19 AM
From: hedgefund	Respond to of 197357

< Why would anyone let a contract expire and then give an option to resume it after it had lapsed for a period of time. That is just nuts.> It's not as crazy as you think. The end game for Qualcomm is to have Nokia pay royalties for wcdma on a par with cdma. Allowing Nokia to opt in (extend the license agreement after it infringes) at best (assuming Nokia can opt in after a breach during the licensing hiatus)allows Nokia to limit its damages but I don't think Qualcomm wants those damages as much as it wants a continuing and hopefully growing royalty stream of payments from Nokia. The option (assuming Nokia can opt in or exercise after a breach) allows Nokia some incentive to test judicially its claims before caving in since it can limit its damages but if Qualcomm had to give that up for a licensing agreement way back when, it seems like a sensible (though not perfect)concession. There's some compromise in almost every deal in the real world. Imagine what we would be saying if the option had held up a deal all of these years. We would now be saying why was Qualcomm so stupid as to insist on a no option license agreement since it has a winning hand legally.